28th Jan 2015 09:37
LONDON (Alliance News) - Gowin New Energy Group PLC on Wednesday said it has secured GBP1.2 million in funding, comprising a GBP600,000 share placing and a GBP600,000 convertible loan.
Gowin said it has reached an agreement with Choice Only International Ent Co Ltd, a Taiwan-based digital storage devices company, under which Choice will conditionally subscribe to 30 million shares in Gowin at 2 pence per share.
Shares in the company jumped on the financing news, more than doubling in value to 1.275 pence to be the best performer in the AIM All-Share.
In addition to the placing, Gowin has agreed a GBP600,000 convertible loan deal with Chen Chih-Lung, the chief executive of Choice.
The convertible loan funding will be used to meet the company's short-term working capital needs and will be converted into 30 million shares at 2 pence per share subject to the passing of resolutions at an extraordinary general meeting the company intends to hold.
Gowin currently has 345.71 million shares.
The loan also gives Choice the right to nominated two directors to the board of Gowin. The company added that Luke Webster stepped down Wednesday as a non-executive director of Gowin in order to pursue other business interests.
"This fundraising is a first step in the necessary transformation of the company after an extended period of working capital constraints. Further transformation measures are planned. The board is grateful for the support of shareholders and pleased to have year 2014 behind us," said Gowin Chairman Garry Willinge.
The financing deal will provide relief to investors in the company, which warned on Monday that its working capital remains constrained. It also said its nominated adviser has stepped down, meaning it will have to appoint a new adviser by February 27 to avoid trading in its shares being suspended.
Gowin last week said it expects to post a big writedown for 2014 owing to problems it has faced in collecting money owed to the company by its debtors.
Since October, Gowin has collected less than CNY1 million from its debtors. At the end of 2014, the unaudited balance of accounts receivable was CNY157 million, up from CNY91 million a year earlier.
By Sam Unsted; [email protected]; @SamUAtAlliance
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