LMP board recommends liquidation plan; company set to sell 6 dealerships

LMP Automotive Holdings Inc.’s board of administrators has unanimously advisable that stockholders approve a proposed plan to liquidate and dissolve the corporation, whilst the publicly traded car retailer has agreed to sell what appears to be like most of its franchised dealerships.

LMP stated Monday that it has entered into dealership and actual estate asset sale agreements for its Kia dealerships in Port Charlotte, Fla., and Cape Coral, Fla., as effectively as Kia and Subaru stores in Mount Hope, W.Va., a Chevrolet dealership in Oak Hill, W.Va., and a Buick-GMC retailer in Beckley, W.Va.

It can be not obvious if LMP is marketing the 6 dealerships in one transaction or in numerous specials. LMP claimed closing is predicted in Oct.

The retailer reported its board recommends that the company’s stockholders “vote to approve a proposed system of liquidation of LMP’s belongings and the dissolution of the business” at its future particular meeting of stockholders. LMP did not indicate when the conference is to take location.

“The board and the management workforce all imagine that provided the diversified nature of our portfolio, pursuing a number of transactions with unique opportunity consumers for assets or groups of property offers the finest possibility to increase stockholder worth,” CEO Samer Tawfik said in a statement. “We think that the approach of liquidation will maximize stockholder price as we continue on to sell our remaining belongings. Management believes that upon finalization of the strategy of liquidation we assume that the corporation will be able to distribute about $115 million to $126 million to shareholders. Centered on 10.9 million shares remarkable, that would show shareholders will acquire $10.55 to $11.56 per share.

LMP’s inventory shut at $6.73 a share Friday prior to jumping 11 per cent to $7.49 in the morning Monday. The rate had topped $20 a share in just the past 12 months.

The program to liquidate the company marks the latest twist for LMP, which in early 2021 stated it hoped to receive 80 to 100 dealerships by the conclude of 2022.

In February, LMP mentioned it was discovering strategic solutions for its enterprise, like a doable sale of the organization. Past month, LMP mentioned it employed BofA Securities to aid it request strategic options for its automobile retail company. LMP also fired its CFO in July.

LMP reported the approach of liquidation will permit the company to enter into “profits for its remaining assets not at present subject matter to sale agreements and to enter into benefit maximizing transactions with no subjecting any this sort of transaction to the delay and conditionality involved with having to seek and obtain stockholder acceptance.”

Past month, LMP mentioned it signed an settlement to market its Chrysler-Dodge-Jeep-Ram retailer in White Plains, N.Y., which it expects will generate $15.8 million. That transaction is expected to shut in Oct.

The firm has not noted a gross sales agreement for the a single remaining franchised dealership in its portfolio, a Chevrolet-Buick-GMC-Cadillac retail store in Greeneville, Tenn., or any of its made use of-car or truck shops.

LMP has not noted financial benefits for the fourth quarter of 2021 or the very first or next quarters of this yr and has stated it will restate economic outcomes for the 1st 3 quarters of 2021. The company also faces a doable course-action lawsuit and has filed lawsuits looking for the return of deposits it created for dealership acquisitions it afterwards terminated.