3rd Feb 2016 08:19
LONDON (Alliance News) - Deltex Medical Group PLC, an oesophageal doppler monitoring company, on Wednesday revealed a package of three measures backed by management and a key shareholder to raise up to about GBP3.0 million, enabling it to pay off existing debt and target the US market.
The money will be raised through a placing of shares for GBP1.1 million, and open offer to raise up to GBP750,000, and new convertible loan notes to raise GBP1.2 million.
The company said 27.9 million new shares will be placed with "institutional and other" shareholders, priced at 4.0 pence per share, with qualifying shareholders to be given the chance to participate at the same price in the open offer of one new share for every 11.711 already held.
The new loan notes, which are convertible into equity at 6.0p per share, and are due in 2019 with an interest rate of 8% in the meantime.
Deltex will used GBP575,000 of the convertible debt proceeds towards a partial repayment of the existing convertible loan note, due in February 2016, which is held by Amati AIM VCT PLC.
The GBP1.1 million raised under the placing and any proceeds from the open offer will be available for US expansion and working capital, the company said.
It added that "to the extent that up to GBP750,000 is raised from the open offer, it has agreed to use a portion of the sums raised through the loan notes' subscription equal to the first GBP425,000 raised to repay Amati Tranche 2 with any balance being applied to fund working capital and to accelerate the US roll-out".
"The directors believe that following receipt of the proceeds of the subscription for the loan notes and the placing, the company will have sufficient working capital to finance its operations for the next 12 months," the company said.
Deltex warned of a threat to its finances in the event shareholders don't approve the loan notes and placing, which would put a stop to the open offer. In those circumstances, Deltex would "need urgently to pursue additional or alternative funding sources, including by way of equity or debt, which are unlikely to be available before the redemption date of the Amati loan note or at all or, if they are available, may be expensive and/or onerous for the company".
Chairman Nigel Keen intends to subscribe for a total of GBP500,000 in the placing, equivalent to 12.5 million shares. In addition, Imperialise Ltd, a company linked to Keen, plans on subscribing for GBP500,000 of the convertible debt.
Jonathan Shaw, the company's finance director, plans on spending GBP500,000 on 125,000 shares in the placing, while non-executive directors Julian Cazalet, Mark Wippell, Christopher Jones are due to participate as well. The three non-executive directors are to spend a combined GBP85,000 in the placing, for a total of 2,125,000 shares.
JO Hambro Capital Management Ltd, which already owns 11.6% of the company, plans on spending GBP200,000 on 5.0 million shares in the placing.
Shares in Deltex were untraded at 4.67 pence early Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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