31st Jul 2018 11:50
LONDON (Alliance News) - IDE Group Holdings PLC on Tuesday said it intends to raise GBP5.5 million before expenses through a subscription, convertible loan notes, and an open offer.
The stock was trading down 43% at 3.50 pence per share on Tuesday.
MXC Guernsey, subsidiary of MXC Capital Ltd which is an existing shareholder with a 22% interest in IDE, has agreed to subscribe for 78.9 million shares while Salvators, an investment vehicle of IDE's Interim Non-Executive Chairman Bill Dobbie, will subscribe for 18.3 million shares. Dobbin holds a 8.9% interest in IDE.
Overall, the company said it will issue 128.0 million subscription shares, at a price of 2.5p each, raising GBP3.2 million.
In addition, the company said it will raise GBP1.8 million via the issue of the convertible loan notes. The convertible loan notes are convertible over a term of five years from the date of issuance into shares at a price of 2.5p each and have no interest attached.
Finally, IDE will issue 20.0 million shares via open offer at the same price to raise up to GBP500,000. The company said none of MXC, Kestrel or Salvators will take up their entitlements under the open offer.
The funds will be used to partly cover debt, which totalled GBP13 million as at the end of June. IDE said it was exploring a number of options, but believes the fundraising is the best option available.
The cloud & IT managed services provider also said it plans to repay the GBP2 million unsecured loan notes issued in May.
IDE said the repayment of GBP1.3 million of unsecured loan notes will be made by way of 30.0 million shares issued at a price of 2.5p each and 20.0 million shares issued at the same price to investor MXC Guernsey and Salvators Lending.
The remainder of the unsecured loan notes will be repaid to Kestrel Opportunities, a cell of Guernsey Portfolios PCC Ltd by way of an issue of additional convertible loan notes.
Related Shares:
IDE.L