Loss-making Greenchip in share swap

Aim-listed Greenchip Investments, the bombed-out e-business backer-turned degradable plastic specialist, lost £473,500 in the six months to June and has agreed a near-£350,000 share swap with the currently floating New Opportunities Investment Trust, writes Robert Tyerman.

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Aim-listed Greenchip Investments, the bombed-out e-business backer-turned degradable plastic specialist, lost £473,500 in the six months to June and has agreed a near-£350,000 share swap with the currently floating New Opportunities Investment Trust, writes Robert Tyerman.

Aim-listed Greenchip Investments, the bombed-out e-business backer-turned degradable plastic specialist, lost £473,500 in the six months to June and has agreed a near-£350,000 share swap with the currently floating New Opportunities Investment Trust, writes Robert Tyerman.

Porter Ribb, who has replaced Malcolm Burne as executive chairman of Greenchip, says the company’s net assets have increased from £1 million last year to £4.26 million following the reverse takeover of US degradable plastic innovator Programmable Life, though that figure includes goodwill of £4.1 million. Greenchip, which lost £502,100 in last year’s first half and £579,200 for all of 2001, says commercial trials for the new products it has backed were initiated ‘at a slower rate than the company would prefer’ and blames ‘global uncertainties’.

However, Ribb says Greenchip is ‘in advanced discussions with an [unnamed] target acquisition’ and expects to close the deal no later than next February, ‘subject to financing and due diligence’. The company has, meanwhile, negotiated to swap 25 million of its own shares – now languishing at 1p – for 375,000 New Opportunities shares, valued at £1 each before the swap but, in fact, trading at 92.5p on their second day on the London Stock Exchange.

At a 92.5p New Opportunities price, the paper value of this deal is, thus, £347,000 rather than £375,000 – although even that represents a hefty premium to the £250,000 market value of 25 million Greenchip at 1p – in late 2000, they were more than 30p. Under the deal, Greenchip, which has replaced Grant Thornton with F.W.Smith Richies as auditor, cannot sell the New Opportunities shares for 90 days.

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