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notice to convert £100,000 of the £700,000 drawn down from the £2.2 million loan facility announced on 1 October 2019 (the "Loan") into 26,295,030 new ordinary shares of 0.01p in the Company ("New Ordinary Shares") at a price of 0.3803 pence per New Ordinary Share.
Could someone please clarify?
We are buying 26,295,030 treasurey shares for £100k?
Or it is a placing of said figure?
In either case it seems a tiny sum and I can't really make sense of it?
Thank you in advance, TAF.
It reads more like a loan note or warrant conversion to me?
The £700k we borrowed from Riverfort, they converted £100k into shares, probably already forward sold into the recent volume, so we are now due them £600k.
..." announces that it has received a notice to convert ....."..
sounds as though the entity that sent the notice deemed it an opportune moment to exercise their right to do this...
Thank you guys.
So yep a warrant conversion.
So, basically, they have £100k's worth @ .38p which they have already forward sold @ anthing up to .54p
Anything up to a 40% profit. Have I got that right?
That is how I read it? if they have of course forward sold, that is speculation.
It cuts down the debt on the H & W Aquisition and it did state in the RNS that there would be some equity issued for parts of the debt. The question is why so soon?
Mr T
Riverfort are renowned for "Taking opportunities" and personally dont blame them, From a positive point this could be why the SP has been held back.
Yes - we borrowed £700k, £500k down payment for H&W
The £700k can be converted at any point:
The conversion price will be the lower of: i) 130% of the closing price of the Company's shares on 30 September 2019 (being the date of the Loan agreement) ("Fixed Conversion Price") and; ii) 90% of the lowest daily volume weighted average price ("VWAP") in respect of Ordinary Shares during the 10 days immediately preceding the date of any conversion notice.
As long as JW doesn't draw down the other £1.5m this will churn with good news, real debt funding is needed fast otherwise this becomes a problem. So £100k already converted and likely already sold to retail. £600k remaining, but half a million has gone to administrators towards the £6m purchase of H&W
That’s how I read it and at today’s SP and same terms, with potentially another GBP2.1m of the loan and future loan that would make a cool (nearly) 800k profit for Riverfort. For longer term funding requirements a rights issue might be interesting for some of us.
And they warrants too....
The Investors will also be entitled to warrants over new Ordinary Shares equal to 30% of each drawdown. The number of warrants will be calculated as a quotient of the drawdown divided by the closing price of Ordinary Shares on the date of drawdown. The exercise price on such warrants will be 150% of the closing price of Ordinary Shares on 30 September 2019 (being 0.69p). The warrants will be exercisable for a period of 24 months from the date of issuance or 12 months if the daily VWAP, during the first 12 months, is at or above 1 pence for 20 consecutive days at any time during that period. Accordingly, 45,652,174 warrants over new Ordinary Shares will be issued to the Investors in respect of the First Draw at a conversion price of 0.69p per share.
Jeeze, nearly 8 years of dilution after dilution.
I'm off to the pub to dilute my blood with Guiness.
Cheers all Si.
Riverfort can’t be blamed. This is their way of derisking early and making money. I know people got annoyed at me for previously warning of dilution after dilution but I am trying to share my knowledge of how this game works. Unfortunately all upside is taken off the table for loyal shareholders by this type of structuring when companies don’t have their own cash piles.
Maybe, just maybe, we will have another positive RNS out early on Monday to help deflect the RNS of today ..just a thought ...it's jolly well about time that Mr J arrive from Brussels with his suitcase !
Mate. You couldn't figure out how the HW employees would be paid earlier in the week. Took me all of 5 mins using something called Google. I take all your midas/de-ramp statements with a very big dose of salt cavern remains
Is the most likely scenario that riverford drives the price down as low as possible, thus being able to buy more shares for their loan money at a lower price for them to sell when price is able to rise?
Riverfort will take zero risk, they won't hang on to shares
Spud
That may not be bad for us so, let them sell the shares, take their profit and minimise their risk. There have been many games played with clns in the past as I’m sure many have seen.
I agree get the shares sold and get them out
Agree. Short term pain but best in the long run.