3rd Jun 2015 11:11
LONDON (Alliance News) - Kuala Ltd shares soared Wednesday after it said Galloway Ltd has agreed to subscribe to over 1.0 million new shares in the company and has been appointed as the company's business development consultant as difficult market conditions force Kuala to consider investments outside of its investment policy.
Kuala shares were up 86.7% to 10.50 pence per share on Wednesday morning.
Kuala, a natural resource and energy investment company, said the subscription and the appointment as the company's consultant was conducted in tandem. Galloway is a specialist engineering consultancy group.
"Given the current market conditions and the difficulty of a capital raise in connection with an investment or acquisition opportunity in the natural resources or energy sector, the directors of the company have approved the appointment of Galloway as the company's Business Development Consultant," said Kuala.
"Whilst the company continues to evaluate potential investment and/or acquisition opportunities, the engagement of Galloway, and its subscription, positions the company to consider and review potential opportunities outside its current investing policy, subject to shareholder approval being received," said Kuala Chairman Stephen Dattels.
Galloway has subscribed for over 1.4 million new Kuala shares at a price of 5.88 pence per share, raising total proceeds of GBP84,657.
"The placing was completed with Galloway concurrently with its appointment as the company's Business Development Consultant and was regarded as an important step by both parties, underlining Galloway's support for the company and its management, and its strong belief that the current market conditions present an excellent opportunity for the company to secure an investment or acquisition opportunity in the near future that will add real shareholder value," said Kuala.
In return for being the company's business development consultant, Kuala will issue Galloway with a further 1.1 million new shares at the same price of 5.88 pence for upfront fees.
"Galloway is currently conducting technical and financial due diligence on a number of potential investment opportunities for the company, and has travelled extensively meeting with management teams. Galloway expects to report to the company on its due diligence conclusions within 60 days," said Kuala.
By Joshua Warner; [email protected]; @JoshAlliance
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