Nasdaq authorities have announced that they want to remove the ADS deposits of Netia Holdings from the exchange.
The decision was made on the basis that Netia does not possess sufficient assets of USD4m and sufficient own capital of USD10m.
Nasdaq went onto to justify its actions by saying that as Netia had opened proceedings to make a deal with creditors and had applied to courts in the southern district of New York for bankruptcy protection then this was sufficient cause to remove it from the technology stock market.
Michal Marczak, analyst at DI BRE Bank said that if Netia can increase its capital through a share issue then it would fullfil the conditions laid out by Nasdaq and the risk of being withdrawn from the market would pass.
Netia wants to issue more than 300m shares for creditors. The appropriate contracts are now being signed. Creditors would take a 91 percent stake in the company. Once this operation is complete less than one percent of the company will be quoted on the US stock market which the Warsaw stock exchange commission KPWiG estimates at around three million shares.
The Polish operator appealed against the decision to the Nasdaq Listing Qualifications Panel although Netia has admitted that it does not expect good news. The company will stay listed until a final decision is made. A temporary delisting occurred but Netia was reinstated on 20 March.
The effects of a delisting in the USA could cause a selling panic of Netia stock in Warsaw. There are funds that bought Netia only because of its New York quotation and they would be first in line to sell.
This is not the first time that Netia has come close to delisting. When the share price fell below the minimum USD1 required the authorities should have been delisted it but instead they change the regulations allowing Netia, and many others, to stay.