9th May 2016 09:52
LONDON (Alliance News) - Payment services provider MoneySwap PLC on Monday said it received an USD80,000 loan from Changsha Zhangdian Investment Co Ltd, which will be used to fund the costs associated with a proposed share subscription.
The loan is the first drawdown under a USD200,000 facility, with the balance due to be drawn down before the end of May.
MoneySwap is seeking to increase its equity base to provide funding for its short and medium-term development needs.
It said it is in advanced discussions with Hunan Commodity Exchange Co Ltd, in which Changsha Zhangdian is a substantial shareholder, with the intention of HNCX investing around USD4.5 million by way of subscription for new shares and/or warrants to subscribe in new shares in MoneySwap.
The USD80,000 loan will be used to meet the legal and regulatory costs associated with closing the proposed subscription and for short-term working capital needs. The loan is unsecured, interest free and repayable in full out of the proceeds from the subscription.
MoneySwap said that it is likely HNCX will acquire a controlling stake in the company, leading to a number of board changes.
MoneySwap is holding its annual general meeting on June 3, during which shareholders will vote on resolutions relating to the subscription.
"The directors consider that the proposed subscription would be in the best interests of all shareholders and all other stakeholders in the company and intend to vote in favour of the proposed resolution at the AGM," MoneySwap said in a statement.
"If MoneySwap fails to secure the funding it requires, there would remain a significant doubt over the company's ability to continue as a going concern," it added.
Shares in MoneySwap were untraded on Monday, last quoted at 0.200 pence.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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