Trafalgar Capital Advisory Partners has come to the rescue of Aim adviser Libertas Capital.
Trafalgar Capital and other investors will provide up to £3.65m – made up of a loan of £250,000 and convertible loan notes of up to £3.4m. The loan has already been received by Libertas.
Libertas requires the cash because Avis Energy did not come up with any of the £8.5m it promised to invest in the company.
Interestingly, Libertas says that this cash will provide “sufficient working capital to support its operations for at least six months”. There is no news about a replacement for Grant Thornton as nominated adviser. Any potential nominated adviser may feel that six months finance is not enough to warrant taking on Libertas as a new client. If a company transfers from the Main Market to Aim it needs to state that it believes there is sufficient working capital for 12 months and this seems sensible for any new company joining Aim. Of course, Libertas is still quoted on Aim, but if the replacement nominated adviser is not found by 16 February it will lose the quotation. If it wants to return to Aim after that it will probably have to raise more cash.
The convertible loan notes are convertible into shares at 2.5p each. If they are converted they would equate to 60.8% of the Libertas share capital.
On top of that Trafalgar Capital can subscribe for £100,000 of convertible preference shares, which can be converted into 19.95% of Libertas.
Libertas will create a long-term incentive plan for staff which offers preference shares convertible into up to 20% of Libertas.
Trafalgar Capital will refer clients of its Trafalgar Capital Specialized Investment Fund, which has stakes in more than 60 companies worth €100m, to Libertas if they require funding or merger advice. Libertas clients will be able to take advantage of mezzanine and convertible loan finance supplied by Trafalgar Capital.
Trafalgar Capital has the right to appoint two directors. Trafalgar Capital provides corporate finance advice and funding for small quoted companies.
Aim clients include New Media Lottery Services, Parallel Media Group, Vision Media Group and Retec Digital, which is about to leave Aim in order to reduce its costs.
Plus-quoted clients include Seven Arts Pictures and Secure Fortress.
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