LONDON (Alliance News) - Motive Television PLC Tuesday said it has secured up to GBP3.0 million of investment through a placing of convertible securities with New York-based Bergen Global Opportunity Fund, as it looks to fund the anticipated acquisition of the last third of its Spanish subsidiary.
Motive Television Executive Chairman Michael Pilsworth said the securities will allow for the development of its Tablet TV service in "the US, UK, and globally" and take advantage of the growing market for its entire content express platform.
"It also will enable the company to acquire the remainder of its Spanish subsidiary and provide stability and reduced risk to the company going forward," Pilsworth said in a statement.
"The agreement provides Motive with immediate access to funds through a flexible, convertible instrument with the ability to secure additional funding in stages, whilst potentially minimising dilution to existing shareholders," Pilsworth said.
Motive said it has agreed to issue Bergen with 600.0 million shares by way of a so-called commencement fee in relation to the overall funding. It has also agreed to issue Bergen with 2.5 billion warrants with a four-year exercise period, allowing the subscription of one share per warrant at an exercise price equal to 140% of the average of the daily volume-weighted average prices of the shares during the 20 trading days prior to the date of execution of the deed.
Motive Television said the three-year zero coupon convertible securities will be issued in four tranches. The initial convertible security will have a nominal value of GBP1.5 million and will be issued "shortly." The second will be issued 150 days after the first and will have a nominal value of between GBP400,000 and GBP500,000. Each of the two subsequent convertibles will be issued 100 days after the second convertible and will each have a nominal value of between GBP400,000 and GBP500,000.
The convertible securities will have a term ending May 12, 2017.
Under the terms of the deal, Motive said it will have the right to repurchase the convertible securities for cash within a certain redemption period.
In addition, Motive said it will have the right to terminate the agreement at any time and not to issue the remaining convertible securities subject to the payment of a modest termination fee.
Furthermore, Motive said it will have the right to pause the funding schedule in its discretion, at no additional cost, without terminating the deed.
Bergen will be able to convert the securities into shares at a conversion price set based on daily volume-weighted average prices of Motive's share price, depending on the circumstances.
Motive said Bergen has agreed on certain limitations on its ability to dispose of the shares following a conversion. It has also agreed not to short-sell Motive's shares. Bergen has agreed that it won't convert more than GBP400,000 in the first three months after execution of the so-called convertible securities issuance deed unless the trading volume of the company's shares on AIM exceeds a certain threshold.
Motive Television shares were Tuesday quoted at 0.0199 pence, down 6.4%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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