Cantronic Systems Inc. (TSX-V:CTS), a B.C. company that makes video surveillance and infrared cameras, plans to buy back its common shares and go private.
Cantronic, which placed 23rd in Business in Vancouver’s Fastest-Growing Companies list this year, focuses exclusively on the Chinese market, where sales have been dropping. In September, the company reported a second quarter loss of $234,000, compared with net profits of $1 million in the second quarter of 2011.
"Given the tough market conditions for public companies with operations in China, deteriorating sales results and the high cost of maintaining a stock exchange listing, I sincerely believe that it is in the best interests of the company that it be taken private," said Cantronic CEO James Zahn.
Cantronic's stock took a bounce on the news. According to Stockhouse, it was the second most traded stock on the TSX Venture Exchange Friday. The company's stock rose from nearly non-existent $0.015 to $0.035.
The company proposes to consolidate its issued and outstanding common shares on the basis of one new common share for every 1,600,000 common shares now issued and outstanding. After consolidation, shareholders who would receive less than one whole new common share will have those fractional shares purchased by the company at $0.04 per share.
Upon completion, Cantronic will apply to have its new common shares delisted from the TSX Venture Exchange.
The proposal was considered and approved by an independent special committee of the directors with the guidance of an independent financial adviser. The plan is subject to shareholder approval by way of a special resolution.
A special meeting will be held in Vancouver, at 3 p.m. December 28, 2012. Notice of the meeting will be sent to shareholders.
