Aferian PLC (AIM:AFRN) has pulled off a coup in the current risk-off capital markets, which has starved small-caps of access to much needed investment.
Not only has the video streaming business raised US$4mln in fresh cash (that is around £3.1m in the local currency), it has done so by issuing new shares at around 20% premium to their market price on Monday.
The mildly surprising news drove the stock up 29% to 12.9p, valuing the business at £11mln.
The cash injection from the share placing will be used as general working capital and mitigate the requirement to use debt to fund its recovery.
“Our intention through this proposed placing is to ensure we have access to appropriate, diverse pools of working capital to fuel our ambition,” chief executive Donald McGarva told investors on Monday.
“Following successful completion of the proposed placing we will not only retain the adequate headroom already secured over our banking covenants, but also have access to capital solely focused on initiatives to drive forward our advantage in the video streaming market, which is growing fast as streaming increasingly becomes the most popular way to consume video."