Madara Bulgarian Property Fund is to join the growing number of overseas property funds delisting from AIM.

The Bulgarian land investor aims to delist on 6 January and will sell its assets “in an orderly fashion” and return the proceeds to shareholders. Since floating on AIM in June 2007 the company has bought, or committed to buy, land in Bulgaria at an aggregate cost of €35.7m.

The company blamed the delisting on a lack if liquidity in the shares and the “high” costs and “disproportionate” amount of time spent on meeting AIM listing requirements.

It blamed its sell-off of assets on the change in market conditions for eastern European property since it listed. “The board believes that funding for this type of investment, either by way of equity or debt, is no longer available at terms which make commercial sense,” the company said. “Therefore, the directors consider that the company is unable to generate sufficient funding to pursue these investment objectives and, as a consequence, to generate sufficient liquidity to meet its working capital requirements for the foreseeable future.”

The company is to raise €1.2m of new equity from a deeply-discounted rights issue to provide working capital during the 12-month sell-off programme. It is selling 24m shares at €0.05 each, which represents a discount of 90% to net asset value and 60% to its €0.125 share price prior to the announcement.

The company’s major shareholders are Moran Trade & Investments with 48%, F&C Asset Management with 20%, RAB Special Situations (Master) Fund with 16% and former Formula One team owner Eddie Jordan with 5.8%.

So far this year – of the 70 or so ‘tiddlers’ listed on AIM – China Central Properties, Summit Germany, Bulgarian Property Developments, Fabian Romania, Rutley European and Puma Brandenburg have been taken over. Delek Global Real Estate, Canton Property Investment, Nanette Real Estate and Westcity have delisted, and Madara and Spazio Investment are shortly to delist.

Several other companies, such as Trikona Trinity, Hirco and Speymill Macau, have come under attack from activist investors and hedge funds.

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