Nektan PLC (LON:NKTN) shares zipped higher on Thursday morning after the gaming software group posted a sharp rise in annual revenue as well as unveiling plans to raise £3.5mln and restructure its debt.
The company, which provides technology to the likes of BetVictor, said it had received support for a £1.5mln equity placing which would see it sell shares at 15p – some 5% higher than Monday’s closing price.
It has also agreed in principle to sell a 57.5% stake in its US subsidiary, Respin, from £2.0mln.
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Shareholders will have their say on the plans at the annual general meeting (AGM), currently scheduled for 7 February.
Nektan has reached an agreement with a majority of its convertible loan note holders that between now and the AGM, they can convert their notes and the accrued interest at the placing price of 15p.
After the AGM, the conversion price will go up to at least 30p or double the latest equity issue price. Interest rates on the notes will only come down to 2.5% per annum from 10%.
Founder Gary Shaw is one of those converting £650,000 of his outstanding loan plus interest into equity at the 15p a share level.
All of the above is conditional on Nektan agreeing on a payment schedule with UK tax officials over £2.9mln of owed UK point of consumption of tax, negotiations for which are already underway.
52% rise in revenues
“We are very pleased to have received significant support from both existing shareholders and new investors as well as a material proportion of our CLN holders," said new chief executive Lucy Buckley.
“In addition, finding an investor for our US subsidiary, Respin, is a significant milestone in Nektan's history.”
Alongside news of the fundraiser and loan notes conversion, Nektan posted a 52% rise in revenue for the year ended 30 June 2018.
Revenue increased to £20.1mln (2017: £13.3mln), while net gaming revenue jumped 48% to £19.4mln (2017: £13.1mln).
The adjusted underlying loss narrowed to £2.4mln (2017: £3.4mln), although pre-tax losses widened to £7.2mln (2017: £6.2mln) reflecting higher admin costs.
Shares rose 4.3% to 14.6p on Thursday morning.