Aim broker IAF Group is raising £1m to give it additional working capital.
The placing price is 3.2p. Each share has a warrant attached which enables the holder to subscribe for one share for 3.2p. This can be exercised for 24 months after the admission of the placing shares.
The shares fell 0.12p to 3.12p, valuing the company at £2.04m. This represents a 12 month low.
Management has warned that it will take longer than expected for IAF to become cash flow positive. Corporate finance fees are difficult to forecast and delaing commissions are lower than one year ago.
Concert parties related to IAF boss David Massie and major shareholder Gordon Crawford are effectively underwriting the placing. They have agreed to acquire enough placing shares to maintain their shareholdings at 29.75% each. If any of the other placing shares aren’t taken up they will buy them on a 50/50 basis.
Shareholders will have to agree to the two concert parties increasing their stakes above 30% without having to launch a bid. The general meeting is on 22 May.
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