Interactive gaming company Netplay TV (LON:NPT) has raised £2.41 million net of expenses, which it believes will significantly strengthen the balance sheet as it restructures the business, so it can return to profitability.
The company will issue 83.3 million shares at a price of 3 pence each.
"The funds raised through this placing will ensure NetPlay TV is able to complete its restructuring,” chairman Clive Jones said.
“We believe with a renewed focus on its core "live" casino products will allow the business to return to a sustainable profitable state. We will keep the market updated of future developments."
Concurrently the company is also planning to reorganise its share structure, with a subdivision of share capital.
The placing has been supported by investors close to the company with major shareholders Directforce Trading and Gartmore Investment, holding 29.7 percent and 14.1 percent respectively, both participating in the placing.
The company’s directors also subscribed for shares – including chief executive Martin Higginson, managing director Charles Butler, chief operating officer Guy Templer, as well as non-executive directors Andrew Lapping and Graham Stevens.
NetPlay decided to refocus its business recently, after a new format failed to live up to expectations. In September’s interim results, it highlighted the impact the venture had on the business.
The company reported a 21 per cent rise in first half revenues to £11.3 million, and said total casino income was up 73 per cent to £8.8 million in the six months June 30.
As a result the company posted pre-exceptional EBITDA of £740,000, up from £120,000 a year earlier.
However the company posted a loss before tax for the period of £7.9 million once exceptional items and impairments were factored into the calculation.
The group has a television partnership with Channel 5 and hoped to repeat the success story with ITV.
“Unfortunately, the new soft gaming format did not perform in line with our expectations and has been a major cost to the company,” said chairman Clive Jones.
“We have taken swift and decisive action and I am pleased to report the cost cutting exercise and the renewed focus on our proven "live" casino format is starting to show positive signs as we rationalise the business.”