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LONDON (Alliance News) - Westminster Group PLC Wednesday said it has raised GBP2.3 million through the issue of convertible loan notes, which it plans to use to strengthen its balance sheet, and support its ongoing costs, particularly as it expands its Managed Services division.
Shares in the security and defence products and services firm are trading down 13% at 25.25 pence Wednesday morning.
Westminster said it issued GBP1.65 million in convertible unsecured loan notes with Darwin Strategic Ltd. The notes have a zero coupon attached and will be divided into 66 individual notes with a par value of GBP25,000 each.
The notes are convertible into new shares at a conversion price of 39p per share, or 90% of the arithmetic average of the five lowest daily volume weighted average share price per share out of ten trading days before the conversion, depending on which is lower.
Darwin also has been issued with warrants to subscribe for 1.1 million new shares at the same exercise price of 39p per share.
Additionally, Westminster has agreed a variation to a convertible secured loan note it issued in June 2013. It issued the note enabling the drawdown of a maximum of GBP4 million with a three year duration; as at June 19, 2013 GBP1.32 million of the note had been drawn down. Subsequently GBP742,000 of this was converted into shares in Westminster, leaving GBP576,000 outstanding.
However, the terms have now been varied to attract incoming investors, with the maturity date on the loan note being extended to June 2018. The conversion price can now be greater than 35p, when previously the conversion price was 35p. On Tuesday, new investors subscribed for a further GBP670,000 of the convertible secured loan note.
"We are mindful both of the cash needs of the business, as we continue to pursue growth opportunities, and the effects of dilution, and we believe that the financing announced today not only provides a stronger balance sheet for business development but also limits the potential dilution to existing shareholders," said Chief Executive Officer Peter Fowler in a statement.
Westminster said it plans to release its 2014 results on May 21.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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