Rns £1.3m placing7 Jun 2019 16:46
7digital Group plc (AIM: 7DIG) ("7digital", the "Company" and together with its subsidiary undertakings, the "Group") is pleased to announce the following important developments to raise additional finance to meet the immediate working capital requirements of the Group:
· a consortium, comprising Magic Investments S.A. (a technology investment holding company) ("Magic") and Shmuel Koch Holdings Limited ("SKH"), has conditionally agreed to subscribe for, an aggregate of, 634,132,641 new Ordinary Shares (the "Subscription Shares") at 0.2 pence per share (the "Issue Price"), to raise £1.3 million (before expenses);
· Magic has agreed to capitalise the outstanding £585,932 principal and accrued interest of the Convertible Loan Notes held by it at into 332,915,704 new Ordinary Shares (the "Exchange Shares") (at a 12 per cent. discount to the Issue Price (the "Exchange Price"));
· a number of changes to the Board have been proposed, conditional upon the passing of the Resolutions at the General Meeting to be convened for 10.00 a.m. on 25 June 2019, details of which are set out below.
The Issue Price represents a discount of 11 per cent. to the closing middle market price of an Ordinary Share on 6 June 2019 (being the last dealing date prior to the publication of this announcement).
In order for the Company to lawfully allot the Subscription Shares and the Exchange Shares the Company is proposing a subdivision of each Existing Ordinary Share of one penny into one New Share of 0.01 pence and one Deferred A Share of 0.99 pence (the "Capital Reorganisation").
If the Debt for Equity Swap and the Subscription are completed, the Consortium will hold, in aggregate, up to a maximum of 69.7 per cent. of the Enlarged Share Capital, with Magic individually holding up to a maximum of 39.1 per cent. of the Enlarged Share Capital and SKH individually holding up to a maximum of 30.6 per cent. of the Enlarged Share Capital.
The Debt for Equity Swap and the Subscription are conditional upon, amongst other things, the Capital Reorganisation being approved by Shareholders, the Company obtaining approval from its Shareholders to disapply statutory pre-emption rights and to grant the Board authority to allot the New Ordinary Shares in connection with the Debt for Equity Swap and the Subscription, and the Independent Shareholders approving the waiver of the obligation to make a general offer pursuant to Rule 9 of the Code which would otherwise fall upon the Concert Party as a result of the issue and allotment to the Consortium of the New Ordinary Shares. In addition, the Capital Reorganisation is conditional upon Shareholder approval to sub-divide the Existing Ordinary Shares and adopt the New Articles.
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