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What: Shares in City of London Group (LSE: CIN) plunged by over 20% in early trade this morning, following the resignation of its chairman and a non-executive director.
So what: Respectively, John Williams and Nigel Sidebottom stepped down with immediate effect as the group revealed the loss of £17.4m worth of fundraising, previously agreed with two new investors: Paul Iliescu, a high net worth German citizen, and Bruce Mee, founder and CEO of LibraAM AG and a Zug based financial investor.
The funds failed to transfer the security payment by the close of play on 23 December, causing the initial proposal to lapse. Both Mr Iliescu and Mr Mee have indicated that they continue to wish to pursue a transaction with the group, but the board “has declined a further extension of the deadline for subscription monies being put in escrow”.
Now what: Management will now have to review its strategic options, “recognising that it will need to secure additional funds from alternative sources to fund the underlying platform development requirements”.
The departures of chairman John Williams and Nigel Sidebottom add to a recent top-level exodus — including former chief executive officer Eric Anstee last month — which has shaken shareholders’ faith in the management of the company.
