23rd Jun 2014 15:45
LONDON (Alliance News) - Eleco PLC Monday said it wants to raise up to GBP3.95 million before fees and expenses by issuing new shares through a subscription, while it has also entered a refinancing agreement with Barclays Bank PLC of up to GBP5 million, as it looks to give a boost to its construction software businesses both in the UK and abroad.
The news comes in the wake of Eleco sustaining a substantial capital loss in 2013 due to the impairment of its investment in its building products and precast concrete subsidiaries, whose assets were sold off as a result. Eleco said that it agreed with Barclays during initial discussions regarding the refinancing deal that it would be "desirable" to raise additional equity capital at the same time as the new facilities were put in place.
Eleco said the subscription will take place in three parts. The first is for GBP628,394, the second for GBP1.7 million, and the third for up to GBP1.6 million. Firm applications have already been received for about GBP2.3 million of new shares at 20.75 pence each, with 42.07% of shareholders agreeing to back the arrangement ahead of a general meeting scheduled for July 9.
The refinancing agreement will give Eleco a GBP3.0 million term loan repayable by quarterly instalments over four years and an overdraft facility for up to GBP2.0 million renewable in June 2015.
"Eleco's profitable software interests in the UK, Germany and Sweden are leading providers of innovative state of the art software solutions and tools to the construction industries they serve in the UK, Sweden and Germany and, increasingly, in other markets worldwide," Executive Chairman John Ketteley said in a statement, adding that the company is confident the arrangements will "provide a sound financial base for Eleco's further expansion."
Eleco shares Monday closed up 0.9% at 20.94 pence.
By Samuel Agini; [email protected]; @samuelagini
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