LONDON (Alliance News) - MediaZest PLC said Friday it has conditionally raised GBP110,000 through the placing of 110.0 million shares to prepare for the consequences of Brexit.
The placing price of the shares was 0.1 pence. MediaZest shares were untraded Friday but last closed at 0.091p.
Chair Lance O'Neill has subscribed for 10.0 shares, taking his holding in the company to 53.0 million shares which represents about 3.8% of MediZest's enlarged issued share capital.
Following the admission of the new shares, expected Wednesday, MediaZest will have 1.40 billion shares in issue.
The audio-visual technology supplier said its raised the funds to improve its working capital and strengthen its balance sheet to prepare for the uncertainty caused by the UK's withdrawal from the EU.
In a statement, MediaZest said: "Although the company has continued to write new business in 2019 with both new and existing clients, the directors cannot ignore the impact of Brexit on the UK and EU economies. As such, the company is seeing evidence of retailers slowing or deferring investment decisions, although there is a clear trend for retailers over the longer period to invest in better stores and particularly in digital signage technology - the core competency of the group. Given this current uncertainty the board believe it prudent to raise additional funds to improve the group's working capital position and strengthen its balance sheet."
The also company said the proceeds will go towards costs of project delivery.
The company said: "There are increased demands on cashflow where certain projects need to be funded during the delivery phase. Although the company seeks to agree staged payments with such clients, in the current economic climate and with certain larger clients this is sometimes not feasible. Often due to length of project these costs can be in advance of invoicing - for example legal costs associated with contractual negotiations. Such costs put pressure on working capital, albeit for positive reasons."
MediaZest said it is aware of the "dilutive nature" of any fundraising at the company's current share price, so has limited the amount being raised to only a handful of existing shareholders.
Mediazest (MDZ)