News blog

LZYE Group

• BY: Andrew Hore |
• POSTED: 19/12/2013 |

Hong Kong-based children’s education provider LZYE Group says that it is talking to a Chinese company that may inject cash at 1p a share. 

The share price fell 0.38p to 1.5p, valuing the existing share capital at £3.73m. The share price has fallen by two-thirds in one week. LZYE raised £1.5m at 8p a share in the summer of 2012.

The potential investor will also be a strategic partner and it would purchase shares from ISF Asset Manager. Without this cash injection LZYE will have to rely on ISF for financial support.

LZYE tried to raise £3m from a two-year convertible loan but only £200,000 was raised. The annual interest rate will be 12% and the loan notes are repayable on 14 May 2015. Alternatively, they can be converted at 8p a share – explaining why they are not attractive to investors.

In the year to March 2013, revenues fell by one-fifth to HK$15m and the loss increased from HK$20.1m to HK$51.6m. The increase in loss was mainly down to flotation costs and share option charges. Even so, the cash outflow from operations was HK$29.7m. This more than used up the money raised in the flotation.

The interim figures to September 2013 should be published by the end of the year.

Download the latest AIM Journal from http://wwww.hubinvest.com/AIMPDFDecember2013_51.pdf