LONDON (Alliance News) - Payments company eServGlobal Ltd on Monday said it has entered into an agreement for GBP5.0 million in loan funding.
The deal follows a profit warning that eServGlobal issued a week ago when it said it would have to raise new funding due to its plan to invest in the capital raising by its HomeSend joint venture and due to delays in its cash collection.
The company said it has secured the GBP5.0 million loan facility in two tranches, with GBP2.5 million available to be drawn down by the end of 2015 and the other half available to be drawn down by June 2016. The loan will be provided by Alphagen Volantis Fund Ltd and the Alphagen Volantis Catalyst Fund Ltd, both of which are managed by Alphagen Capital Ltd, which is owned by Henderson Global Investors.
Under the agreement, eServGlobal also will issue 39.9 million options to the lenders, with the exercise price to be the lower of the closing price of its shares on the day prior to the execution of the loan deal, being 7.75 pence on Friday, or a 20% discount to the 60-day volume-weighted average price of it shares for the period starting September 28.
The options represent 15% of the company's current share capital. Henderson currently holds 17.5% of eServGlobal and would hold 28.3% of its enlarged share capital if all the options are exercised.
Shares in eServGlobal were down 0.7% at 7.70 pence.
The proceeds from the loan will be used for working capital purposes and to allow the company to invest in the capital raising by its HomeSend joint venture with BICS and MasterCard.
HomeSend is planning to raise up to EUR10.0 million and eServGlobal, to maintain its 35% stake said it will invest EUR875,000 by October 14, and a further EUR2.6 million by April 15 2016. Should it fail to make the final payment on or before this date, it said, the other joint venture partners are entitled but not obliged to acquire all of eServeGlobal's partly paid shares at the paid up amount.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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