Centurion Electronics believes it has secured potential financing for its business but the fact it only has seven days cash left means that the cash raising will be highly dilutive.
Centurion says it expects the documentation to be complete by 25 January but it warns that if the plans fall through it will not have enough cash to continue trading.
Lloyds TSB will provide a facility of up to £1.5m and will take a first charge over Centurion’s assets.
Ravensworth International will provide a further £750,000 and it will have to give up its first charge over the assets. Ravensworth owns 9.6% of Centurion but if it converts its £2m of loan notes this will increase to 51.9%. The additional £750,000 will be convertible at 0.5p a share. The interest rate is 10%. The existing convertible loan notes and a £250,000 working capital facility provided by Ravensworth will carry the same terms as the new loan notes. That means that they could be converted into 600m shares and Ravensworth would end up with 97% of the portable DVD supplier.
Centurion has to find a nominated adviser by 20 February or its Aim quotation will be cancelled. The shares will be suspended next week. They fell 0.375p to 0.875p.
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