21st Feb 2020 09:26
(Alliance News) - Model train set maker Hornby PLC on Friday said it plans to raise GBP15.0 million through a share issue in a bid to spend on its key brands and digital marketing.
Hornby plans to issue 41.7 million shares at 36.00 pence each through a placing and open offer, which is set to close at 1600 GMT on Friday.
Shares in the company were 3.5% higher at 37.25 pence each in London on Friday morning.
The issue will consist of a "firm placing" of up to 37.2 million new share, raising GBP13.4 million. There will also be a conditional placing for another 4.5 million shares to secure a further GBP1.6 million.
Hornby said the equity raise is to "reinvigorate the group's key brands through accelerated product development and additional capital expenditure", and invest in digital marketing.
Among its brands is Scalextric, which creates remote control slot car racing sets.
Chief Executive Lyndon Davies said: "There is momentum at Hornby. A lot has changed over the last two years and we continue to make good progress. The strengthening of our balance sheet provides a solid foundation for the next steps in our journey."
Hornby also said it has amended a sale and purchase agreement with LCD Enterprises Ltd, which it acquired a 49% stake of in 2017.
LCD is the holding company diecast model vehicles and railway products supplier Oxford Diecast Group. Hornby acquired the stake for GBP1.6 million.
The company has extended a lock-in period until December 8, 2023, six years after the sale and purchase deal was agreed.
As part of the lock-in period, Hornby's CEO Davies, who is a majority owner of LCD, agreed not to sell any of his remaining 51% stake.
In 2017, Hornby said: "Under the acquisition agreement the seller and Mrs Davies have undertaken not, for the duration of the lock-in period, to dispose of, or agree to dispose of, directly or indirectly, any of the remaining 51% of the share capital of LCD Enterprises."
By Eric Cunha; [email protected]
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