Green energy group Powerhouse Energy Group PLC (LON:PHE) has raised £2.5mln by placing shares at 0.8p a share.
The funds raised will largely be used to repay the convertible loan note facility with Hillgrove, with the finance house Hillgrove accepting a £2mln offer to buy back the unconverted loan notes.
A final batch of loan notes will be converted at 0.5p a pop, earning Powerhouse £1.4mln and raising Hillgrove’s holding to just over 300mln shares. Hillgrove has agreed not to sell the newly converted shares within the next 12 months.
Powerhouse was accruing 15% interest on the outstanding loan, so repayment will reduce its annual outgoings.
Yady Worldwide, a recent investor in the company, took £500,000 of shares in the placing, and has agreed to a 12 month lock-in period in respect of the shares.
“This is a significant event and a major turning point in the history of PowerHouse. The conversion of the Hillgrove note allows us to move forward aggressively and provides the potential to unlock the value of the company,” said Keith Allaun, executive chairman of Powerhouse.