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Motive Television

  • BY: Andrew Hore |
  • POSTED: 13/05/2014 |

Motive Television is raising up to £2.98m through a convertible issue, which will at least provide a significant amount of cash rather than the drip feed from share issues.

Bergen Global Opportunity Fund will subscribe for up to £2.9m worth of three-year zero coupon convertible securities in a number of stages. There will be four tranches. The first tranche will be worth £1.48m and then 150 days later a further £and then 150 days later a further £400,000-£500,000 will be issued. The last two tranches will be issued at 100 day intervals and will be in the range of the second tranche. Not all of the tranches have to be issued but MTV would have to pay a termination fee. The convertible term ends on 12 May 2017.

MTV will have the opportunity to buy back the convertible for cash. If it does not then Bergen has the right to convert them into shares. The conversion price is based on a percentage of the price at which the shares have traded with two different options depending on circumstances.

The cash will be used to buy out the minority in the Spanish subsidiary and provide further working capital. In February, MTV is raised £775,000 at 0.02p a share – the same price at which £1m was raised last September.

At 0.019p a share, down 0.003p, MTV is valued at £6.39m so conversion of the zero coupon convertible could be highly dilutive. Bergen has been issued 600m shares in return for the convertibles agreement, as well as 2.5bn warrants with a subscription price of 140% of the average share price over 20 trading days. 

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2014_56.pdf

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