Security-focused investment company Blue Star Capital appears to have headed off the need for a showdown with rebel shareholders following the appointment of two new directors.
Noel Lyons and Anthony Fabrizi have joined the board and will not receive any pay. The rebel shareholders wanted to requisition a meeting to get the two men appointed to the board as well as to remove chief executive Dr Richard Leaver and Peter Varnish from the board. The other two men remain on the board.
Highland Fund Managers, which was involved in the general meeting requisition, has arranged a £400,000 loan for Blue Star and it could provide a further £350,000 over the next 12 months. The interest charge on the loan is 10% and any money from investment sales will be used to reduce the loan. The loan is repayable on 30 May 2012.
Highland has a charge over the companyís assets and it was conditional on the appointment of Fabrizi and Lyons. Blue Star has issued 15m warrants exercisable at 2p a share to the providers of the cash for the loan.
Blue Star had £27,000 in cash at the end of September 2010.
Blue Starís net asset value has fallen from £4.75m to £2.6m over the year to September 2010. That was predominantly down to a fall in the value of investments. That includes the write off of the £1.21m investment in camera technology developer Pedagog. The company continues to trade but it needs more cash.
Blue Star has two remaining core investments, biometric technology developer OmniPerception and low power medium- to long-range wireless communications networks developer Zimiti. There are also investments in file-sharing software provider eSeekers and pharma marketing firm Medcenter.
At 3.75p a share, Blue Star is valued at £5.63m.
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