After the market closed Green Compliance said that it is raising £2.1m via a placing and open offer at 2p a share.
The water, fire and pest control compliance services provider will raise £1.6m from the placing and up to £500,000 from a seven-for-10 open offer. The placees, including ISIS, Cazenove Capital Management and Legal & General, are being offered warrants to subscribe for two new shares at 2p each for every placing share they take up. The existing shareholders are not so lucky. They do not get any warrants.
However, Green Compliance cannot issue shares until it has reduced the nominal value of the shares from 50p to 1p.
Green Compliance needs the cash because its bank facilities are fully drawn. The £7.5m revolving credit facility and £1.65m overdraft are being converted into a term loan of £9m. The new banking terms have not been completed yet and the company will be required to keep a minimum cash balance of £500,000 until they are. A stronger financial position will help to ensure that the company does not lose out on contracts.
Former chief executive John Prowse will be paid the amount due to him under his contract and up to £2,000 plus VAT for legal costs and compensation for loss of employment.
New chief executive Bob Holt was previously non-executive chairman and he will not receive any additional remuneration for the next six months. He will subscribe for 1,528,746 new shares and hold 3m warrants.
At 3.5p a share, up 1p on the day, Green Compliance is valued at £1.27m prior to the new shares being issued.
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