29th Jan 2019 10:55
LONDON (Alliance News) - Matomy Media Group Ltd shares spiked Tuesday as bondholders rejected a proposal that would require Matomy to immediately repay them.
Shares in the internet advertising firm were up 33% at 10.94 pence each.
A majority of bondholders, 73%, voted to reject a repayment plan that would require Matomy to repay bondholders on January 30.
Bondholders will now hold a second vote, on January 29, on Matomy's updated repayment proposal.
Last Wednesday, Matomy agreed to pay bondholders an increased amount between USD2.5 million and USD3 million. The company will also raise USD12 million from key shareholders to make the payments.
The structure of the raising has yet to be finalised but will see USD2 million raised through the purchase of series A bonds.
The agreement comes after months of back and forth with Rainmaker Investments GmbH, who own 10% in Team Internet, a Matomy subsidiary.
On January 9, a majority of the bondholders rejected Matomy's updated repayment plan which included undertaking USD13 million of fund raising on the London Stock Exchange.
Matomy, later the same day, said it has received a fourth letter of support from shareholders over the repayment plan.
The bondholder plan differed from Matomy's in that an additional USD3.5 million would be injected into Matomy, which could be accomplished through the issue of series A debenture to key shareholders.
Bondholders also proposed the injection could be achieved through a reduction in the cash owed to Rainmaker to USD10 million from USD13.5 million via the issue of USD3.5 million worth of series A bonds to Rainmaker.
In February, Matomy raised USD30.0 million through the issue of convertible bonds in order to fund a further acquisition of a 10% stake in Team Internet, taking its stake to 90%. The remaining stake is held by Rainmaker.
Matomy failed to pay the amount due to Rainmaker on November 30 for 10% of Team Internet, triggering Rainmaker's right to repurchase some or all of the Matomy's shares in Team Internet at 60% of their original price.
Matomy long claimed it did not owe Rainmaker an immediate repayment of all amounts under the bonds, but has also been seeking to revise the terms of its outstanding bonds.
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MTMY.L