Green Compliance has managed to raise £3.5m at 1p a share so that it will have sufficient working capital to carry on trading.
The water, fire and pest control compliance services provider has to gain shareholder approval before the shares can be issued. Existing shareholders will be significantly diluted by the latest fundraising, which follows the £1.8m raised from a placing and open offer at 2p a share at the beginning of the year. At the suspension price of 1.1p a share, Green Compliance is valued at £1.38m. The shares will not return from suspension until 27 September – the day after the general meeting.
Green Compliance chairman Bob Holt is subscribing for 28.46m shares in the placing, which will take his stake to 6.42%.
In July, Green Compliance sold part of its fire-related business for £2m and £500,000 of this was deferred for 12 months. The first £250,000 of this deferred consideration has been assigned to HSBC, which also took the other £1.5m and will receive £2.75m from the latest placing in settlement of the debt owed to the bank.
The company will retain the rest of the placing. Holt will also provide a working capital facility of up to £650,000 at an annual interest rate that is 7.5% above base rate. This will eventually replaced by a bank facility.
Green Compliance will report revenues of around £16m in the year to March 2013.
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