Market report: Avanti Communications puts on stellar show as it shines a light on chance of sale

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Shares in Avanti Communications spent a rare day in orbit as investors remained hopeful that the satellite data firm can secure a sale.

Avanti, whose value has shrunk by 80% this year on AIM, rocketed 5.5p, or 17%, to 37p as it confirmed it was still in talks with suitors, having hoisted the For Sale sign earlier in the summer amid crippling debts.

“Upon the completion of due diligence by interested parties, the board intends to request best and final indicative offers for a potential acquisition or any strategic investment in the company,” Avanti said.

Its shares more than halved in a single day in July when it warned it needed to raise at least $50 million (£38 million) of equity as it slashed revenue targets. It today issued more loan notes to shore up its short-term finances.

Larger rival Inmarsat ruled out a bid for Avanti last month. Inmarsat, down 4.11p at 711.39p, announced that it had raised $400 million through a bond offering to repay a loan from the European Investment Bank.

Banking shares dragged the blue-chip FTSE 100 index lower on fears over Deutsche Bank’s potential $14 billion fine, leaving it down 17.95 points at 6712.35.

Morrisons provided analysts with enough evidence yesterday that its turnaround is on track as the City’s scribblers hailed the supermarkets group’s first-half results.

Exane BNP Paribas and Bernstein removed their Sell ratings on the back of its surprise sales growth. The shares remained in favour, up 3.1p at 211.2p.

Gym Group slipped 12.62p to 210p as its private-equity backers Phoenix Equity Partners and Bridges Ventures decided to offload more shares. Between them, the pair sold £31.5 million worth of shares, leaving Phoenix with a 20% stake and Bridges with 10%. 

The sale follows news this week that rival Pure Gym, the UK’s largest gyms operator, is limbering up for a float.

Acacia Mining, the miner formerly known as African Barrick Gold, retreated 33.71p to 466.29p as it revealed setbacks at one of its Tanzanian mines.

On the junior market, troubled  e-invoicing firm Tungsten Corp sank 0.5p to 63.25p as it set out its targets for the year. 

The company, whose biggest shareholder is Crispin Odey’s hedge fund, projected annual revenues of “at least £30 million” and an underlying earnings loss of between £12 million and £14 million, smaller than the £19 million loss it racked up last year.

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September 16, 2016 |
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