LONDON (Alliance News) - Verdes Management PLC Tuesday said it has secured its future after Coms PLC Chief Executive David Breith stepped in to save the company, and it raised GBP750,000 from "an institutional investor", which it didn't name.
The suspension on the company's shares was lifted at the open Tuesday, and they have gained more than six-fold to 0.598 pence by midday.
Verdes said Breith purchased all of Westminster Asset Management Ltd's 24.9% stake in the company, while the placement of 100 million new shares equates to 10.75% of its enlarged share capital.
Verdes said plans are underway on a new investment and business strategy. It is expected that a document on the investing policy will be sent to shareholders Tuesday and a general meeting convened for March 20.
Verdes said it is seeking to invest in a business based in the UK, but may trade overseas, and will target the leisure and retail sectors.
Brieth's Coms PLC provides cloud-based telephony services.
On February 21, Verdes Non-Executive Chairman Daan van den Noort told Alliance News the company was planning to return to the market after it had said it would appoint an administrator.
In its statement, Tuesday, Verdes outlined a number of amendments to and negotiations over convertible loans with several parties, as it seeks to resolve the financing issues that have given it a headache in recent months.
"Westminster has undertaken to procure the termination of Verdes' convertible loan agreement with Newick Developments, and, inter alia, to procure that Newick shall not enforce the loan nor take any other action against the company in respect of any amount outstanding (if any)," Verdes said in a statement.
Verdes had been due to receive the first GBP125,000 tranche of a GBP500,000 loan from Newick on December 30, with the remaining GBP375,000 due on January 15. However, the first tranche was delayed until January 16, and was then recalled before the related conversion shares were issued.
Meanwhile, Breith has given a personal guarantee of another loan taken out by Verdes late last year in the event that Verdes can't meet the repayment obligation on April 21.
The convertible loan agreement, dated November 26, 2013, between Verdes and RAB Capital Ltd, under which RAB agreed to provide Verdes with up to GBP275,000 of loan capital, has been further amended to push to repayment to April 21 from March 15, with RAB not entitled to exercise its conversion rights before April 22.
An additional convertible loan, agreed with Peter Wildey, under which he agreed to provide GBP25,000 to Verdes, has been amended to set the repayment date for April 21, with all conversion rights cancelled.
Verdes said that, given the financial uncertainty caused by the suspension and filing of the notices of intention to appoint an administrator, the board has succeeding in agreeing voluntary reductions to the amounts due to a number of its creditors.
Following completion of the placing, Verdes said it expects to be able to publish its report and accounts for the year ended September 30, 2013 by March 30, as required by AIM Rules.
Neither Verdes nor nominated adviser Neil Baldwin of SPARK Advisory Partners Ltd was immediately available for comment.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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