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Nektan says support for placing and subscription stronger than expected, but Respin due diligence still ongoing

However, the group said there is a short delay in executing the cash-raising and debt restructuring also planned at the time because of further due diligence being undertaken on the proposed sale of its majority shareholding in its US subsidiary, Respin
Gaming software
Back in December, Nektan said it had agreed in principle to sell a 57.5% stake in its Respin for £2.0mln

Nektan PLC (LON:NKTN) revealed that it has received more support for the placing and subscription it launched in December than previously announced, with demand currently at £2.2mln, significantly above the initial minimum of £1.5mln.

However, the AIM-listed gaming software group said there is a short delay in executing the cash-raising and debt restructuring also planned at the time because of further due diligence being undertaken on the proposed sale of its majority shareholding in its US subsidiary, Respin.

READ: Nektan unveils plan to raise £3.5mln and sell off stake in US division as it reports surge in full-year revenues

Back in December, Nektan said it had agreed in principle to sell a 57.5% stake in its Respin for £2.0mln.

In its statement on Friday, Nektan said that although the proposed sale of the majority shareholding of Respin is progressing, the buyer's due diligence processes remain ongoing.

The company added that it expects to enter into a binding contract for the sale as soon as possible, but in any event no later than 30 April 2019.

The firm pointed out that the date coincides with the expiration of the authority provided by shareholders at the company's AGM for the issue of new shares by way of the placing and subscription at 15p each to raise up to £3.5mln.

Nektan said it has entered agreements to date under which subscribers will invest a total of £2.2mln into the company and, in addition, has also received further expressions of interest which may increase the funds raised.

The company said once the date of the Respin transaction is confirmed the subscription agreements will be updated.

The firm added that the position regarding the use of the funds, working capital and dialogue with HMRC remains unchanged.

As previously announced, it said, the company also remains on track for underlying earnings (EBITDA) at its European operations to be at break-even by 30 June 2019, its financial year-end.

Nektan also confirmed that it has sufficient working capital for its present requirements.

In late afternoon trading, Nektan shares were down 5.1% at 14.00p.

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January 22 2019

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