30th Apr 2014 09:50
LONDON (Alliance News) - LED International Holdings Ltd saw its shares slide Wednesday after it said that the receipt of funds from its recent fundraising had been delayed, the latest setback in a months-long struggle to raise new money.
In a statement, the company said it now expects to get CNY30 million of the CNY100 million total funds in the coming days and the rest by mid-May. It had originally expected to get the funds by the end of April.
At the end of March, LED International said it had secured CNY100 million through a conditional placing and issue of convertible loan notes from a group of mainly private investors in Taiwan.
It needs the money to provide capital to its new leasing finance company, Green Pearl Leasing Co Ltd, and for general working capital.
The company had been struggling with financing. The energy saving products company had announced a proposed capital raising at the end of December after its energy management contract business plan was delayed. At that time, it borrowed CNY6 million from Rubyfield Holdings Ltd and Speedy Dragon Holdings Ltd under a working capital loan, and said it would raise CNY25 million through a subscription with those companies. The placing and the loan proceeds combined total CNY31 million.
In February, the company had said that it was still trying to raise CNY31 million from the two investors in an attempt to secure its immediate future and fund its new lease financing unit. In March, it said it was considering its legal options over the deal because it still hadn't received the funds, and said it was also in advanced talks with another party about getting funding. It then announced the new CNY100 million deal with Best Merchan Ventures Ltd, Legend Giant Ventures Ltd, Talent Plus Ventures Ltd and Y&C International Holdings Group Ltd.
Its new leasing unit, Green Pearl Leasing, will provide lease financing to customers. It has been awarded a leasing finance license, but LED International was required to contribute 20% of the subsidiary's CNY100 million registered capital within three months of the license being approved. It has to contribute the remaining money within two years of the approval.
LED International shares were down 11.1% at 16 pence Wednesday morning, one of the biggest declines on AIM.
By Steve McGrath; [email protected]; @SteveMcGrath1
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