LONDON (Alliance News) - London Capital Group Holdings PLC said Tuesday that it plans to raise up to GBP17.5 million through a proposed financing as part of its plan to return to growth.
The company said that GLIO Holdings Ltd, an investment company led by Charles-Henri Sabet, will subscribe to convertible loan notes of between GBP12.5 million to GBP15.0 million, and up to up to 75 million warrants.
Additionally, it is seeking commitments from institutional investors to subscribe for convertible loan notes worth a total of between GBP500,000 and GBP2.5 million, and up to 12.5 million warrants.
The financing is conditional upon approval from shareholders at the company's general meeting July 3, as well as regulatory clearances and due diligence.
The convertible loan notes will pay interest at 5% and will be convertible at any time into shares at a conversion price of 0.27 pence.
London Capital intends to appoint Sabet to the board as an executive chairman.
If London Capital chooses not to go forward with the financing it will pay GLIO holdings a fee of GBP225,000, and GLIO will pay a fee of GBP112,500 if it chooses not to proceed.
Upon completion of the financing, London Capital will pay Peterhouse Corporate Finance Ltd, GLIO's financial advisor, a fee equal to 1.5% of the investment made by GLIO.
The company said the funds will be used as part of its three-stage strategy to return to growth. It intends to focus its efforts on creating and promoting new products to attract new clients at a reduced cost and develop business channels in less mature markets.
"The additional funds and the involvement of Charles-Henri Sabet will enable the business to accelerate our strategy of introducing new products and growing internationally," said Chief Executive Kevin Ashby in a statement.
Shares in London Capital closed down 4.76% at 25.00 pence Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @hanassallnews
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