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LONDON - Pennant International Group plc (AIM:PEN) announced Tuesday plans to raise £1.25 million through an underwritten direct subscription of 5,813,953 new ordinary shares at 21.5 pence per share.
The subscription price represents a 4.4% discount to the company’s closing mid-market price of 22.5 pence on September 12.
The systems support software and training solutions company is structuring the fundraising in two tranches: a firm tranche using existing share authorities to raise £929,531 and a conditional tranche to raise £320,469, subject to shareholder approval at an upcoming general meeting.
Brett Gordon, an existing 12.1% shareholder, has agreed to underwrite the subscription and will receive a 4.0% fee on gross proceeds, excluding any amounts raised from directors and employees. Gordon will be offered at least 60% of subscription shares not taken by other significant shareholders.
The fundraising comes as Pennant prepares for a reduction in its HSBC overdraft facility from £2 million to £1 million, effective November 1. According to the company’s press release statement, proceeds will help reduce the overdraft as planned while enabling continued capital expenditure on its Auxilium software suite and providing additional working capital.
The company expects to announce the results of the subscription, including the admission date for the firm tranche shares and details of the general meeting, by September 22.
The underwriting agreement with Gordon constitutes a related party transaction under AIM Rules. Pennant’s directors, after consulting with the company’s Nominated Adviser, consider the terms fair and reasonable for shareholders.
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