Fund Raising

27 Feb 2009 07:00



27 February 2009

Deltex Medical Group plc

£1m fund raising 

Deltex Medical Group plc ("Deltex Medical" or the "Company"), the global leader in oesophageal Doppler monitoring ("ODM") announces that it has raised £1m by the issue of Loan Notes to Noble AIM VCT plc, a venture capital trust managed by Noble Fund Managers Limited.

The Company has raised the new capital to strengthen its balance sheet during current difficult economic times and to allow it to move ahead more quickly on certain initiatives, particularly in establishing ODM in Spain.

Details of the Guaranteed Unsecured Convertible Loan Notes 2014 (the "Loan Notes")

The Loan Notes are repayable in full on 27 February 2014 being five years from the date of issue although they may be repaid in whole or in part at the Company's discretion in certain circumstances. If such repayment is made the Company will issue the Loan Notes holder with warrants over 8 million ordinary shares each at a price of 12.5p.

The Loan Notes are convertible into 8 million ordinary shares in the Company ("Ordinary Shares") at the effective price of 12.5p, being a premium of 26.6 per cent. over the share price at close of business on 26 February 2009. The Company can also enforce conversion if the ordinary share price is equal to or exceeds 37.5p for any period of 90 consecutive days. 

The Loan Notes are unsecured and interest is payable at 8.5% per annum for the first two years and at 5.5% above LIBOR thereafter. If cash balances of the Company fall below £500,000 or net assets (as defined) fall below £1 million, the interest rate increases by 2% until the cash balance returns to £500,000 or net assets return to £1 million. 

The Company has agreed to restrict the level of secured debt to no more than £1.5m or, prospectively, 30 per cent. of sales. There are provisions governing the issue of further shares below 12.5p or if some form of share split or reorganisation of the share capital takes place. The Board have also agreed that the Company will not pay a dividend without the prior consent of the Loan Notes holder.

Admission

The Loan Notes will not be admitted to trading on AIM. The Company has adequate authority to issue the 8 million ordinary shares on conversion of the Loan Notes. These ordinary shares will rank pari passu with the existing ordinary shares and application for admission to trading on AIM will be made at the appropriate time.

Noble Fund Managers Limited

Noble AIM VCT PLC is a venture capital trust managed by Noble Fund Managers Limited who are a 3.4% shareholder in Deltex Medical.

Nigel Keen, Deltex Medical's Chairman, commented:

"As we reported in our statement on 22 January 2009 we have implemented a plan to accelerate breaking even within our existing cash resources and, four months into it, we remain ahead of this plan. Not withstanding this plan, the Board considers that it would be in the best interests of shareholders to strengthen the balance sheet to deal with unforeseen events.

"This new capital also gives us the opportunity to pursue specific projects aimed at expanding our business where we judge that returns will be maximised by early investment rather than deferring investment until affordable out of operating cash flows."