8th Apr 2014 10:04
LONDON (Alliance News) - Legendary Investments PLC saw its shares rise sharply Tuesday after it increased its stake in investee company Virtual Stock Holdings Ltd, which raised GBP525,000 through an oversubscribed equity issuance to accelerate its growth in the retail sector after recent contract wins and also build opportunities in other sectors.
Legendary Investments said the transaction places a GBP25.4 million post money value on VSHL, a cloud-based software as a service company.
Legendary acquired a 2.5% stake and a warrant for a further 2.5% stake in VSHL in October 2012 for GBP53,000. The warrant has an exercise price of GBP75,000. The transaction values the Legendary's equity stake and warrant at GBP1.2 million, Legendary Investments said.
As part of VSHL's new equity issue, Legendary Investments has negotiated further warrants over new shares and options over 1.2% of the fully diluted equity of VSHL, with an exercise price per share of the placing price.
In aggregate, following the transaction, Legendary's equity, warrant and option interest in VSHL has risen to 5.6%, from 5.0% of the fully diluted equity of VSHL, it said.
VSHL provides a cloud-based software as a service which enables retailers to increase the range of products they sell online without the associated costs of and risks of holding stock.
Legendary Investments said the equity issuance is seen by VSHL as the first in a series of potential strategic transactions.
As part of the equity issuance, VSHL's holding structure has been simplified, Legendary Investments said, without going into detail.
"We are particularly pleased that Legendary has been able to negotiate further warrants and options for itself which will increase its equity, warrant and option interest in VSHL, despite the dilution inherent in the the growth equity fund raise," Legendary Executive Chairman Zafar Karim said in a statement.
"Legendary has proactively supported and assisted VSHL to reach this stage in its development and growth, and looks forward to continuing to do so. As VSHL continues to develop, VSHL anticipates further significant developments and strategic transactions in the near to medium term, including further value crystallisation and potential value realisation," Karim added.
Legendary Investments shares were Tuesday quoted at 0.156 pence, up 41.8%, making it the biggest riser on the AIM All-Share index.
By Samuel Agini; [email protected]; @samuelagini
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