Advanced Oncotherapy PLC (LON:AVO) saw its shares surge this afternoon after it announced that a consortium formed by AB Segulah and other investors has made a £3.9mln loan available to the developer of next-generation proton therapy systems for cancer treatment, and it will not draw further on Bracknor Investment Group’s convertible loan note facility in the future.
The AIM-listed firm said the loan will have a two year maturity and a 12% per annum rolled up interest rate.
In mid-afternoon trading, Advanced Oncotherapy's shares topped the London market gainers, leaping over 70%, or 7.00p higher to 16.75p
READ: Advanced Oncotherapy secures additional £1.5mln loan; appoints new COO
The loan consortium includes AB Segulah - a significant shareholder of Advanced Oncotherapy - and a group of Swedish investors, including AFMS Radgivning Och Invest AB, Peter Gyllenhammar AB, Mijesi AB and Emendum AB.
Segulah will be issued 15.6 mln warrants with a strike price of 25p exercisable at any time over the next five years.
Part or all of the loan can be redeemed at any time by the company at 105% of par value. If an equity financing is carried out by Advanced Oncotherapy at or above 25p before the end of 2017, the loan can be converted into equity at 25p per share.
The group pointed out that Dubai-based Bracknor has agreed to waive the requirement for the company to drawdown a minimum of 10 tranches from its convertible loan notes.
The firm added that the Segulah loan, which is equivalent to three tranches, will entitle Bracknor to receive commitment fees on this amount only at a reduced rate of 2.5%. No further fees are owed to Bracknor.
READ: Bracknor converts another chunk of Advanced Oncotherapy loan notes
The company said it does not intend to use the Bracknor facility in the future, and, as part of these arrangements it will issue 7 mln warrants to the lender, exercisable at 25p which may be exercised at any time over the next five years.
Nicolas Serandour, Advanced Oncotherapy’s CEO said: "The Bracknor financing has been valuable to the Company. I would like to thank them for their flexibility in renegotiating its terms.
“I am particularly pleased to welcome the support shown by our highly valued Swedish investors and in particular the role that Segulah has played in arranging this new facility.
“Segulah was our first institutional investor and has participated in every financing since that date.“
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