LONDON (Alliance News) - Blue Star Capital PLC Monday said it has raised GBP150,000 through a new share subscription with institutional and private investors, money it will use to fund its working capital needs and repay a shareholder loan, leaving it debt-free.
In a statement, Blue Star Capital said that the investors subscribed for 27.3 million shares at 0.55 pence each.
The fundraising, coupled with a conversion of the loan, which was taken out on April 28 2011, means that Blue Star Capital is now free of debt.
Chairman Graham Parr said that the directors' participation in the fundraising demonstrates the board's confidence in Blue Star's outlook. The Chairman invested GBP20,000 in the fundraising, buying 2.6 million new shares, while Chief Executive Anthony Fabrizi invested GBP5,000 in 909,090 new shares.
"A year ago the company had debts of GBP600,000 and we are delighted that Blue Star Capital is now debt free and has additional working capital to pursue its strategy and for supporting its existing portfolio of investments," Parr said in a statement.
Blue Star said that it still owed GBP85,292 under its April 2011 loan, prior to settling it. CEO Fabrizi, has, along with the other lenders, agreed to convert GBP70,292 of that amount into 12.8 million new shares at 0.55 pence each, with the remaining GBP15,000 repaid from the proceeds of the subscription.
Fabrizi converted GBP15,158 due to him under the loan into 2.8 million shares at 0.55 pence each, giving him a 3.04% stake in the company.
Blue Star Capital shares were Monday quoted at 0.502 pence, down 16.4%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Blue Star (BLU)