Nektan has sold 57.5% of Respin to Alternative Investment Partners Limited (AIP), a different buyer than originally planned, for £300,000 cash plus the provision of US$800,000 in working capital.
Following the disposal, Nektan can now complete a convertible loan conversion and equity placing of approximately £2.2mln, which includes £0.685mln from founder Gary Shaw.
That will give enough cash for its own trading, but Nektan is in discussions with HMRC over £3.6mln owing for point of consumption tax which might need a further funding round.
Lucy Buckley, Nektan’s chief executive, said: "We are very excited about this new partnership with AIP who specialise in investing in fast-growing technology businesses.
“The majority sale of our US subsidiary allows Nektan to retain a material stake in the emerging US market without funding it on an ongoing basis.
“Respin has steadily been gaining traction in the US, signing deals with some of the biggest land-based casinos in the world."
"Removal of the cash burn of the US business will allow Nektan to focus on the profitability of its core European business and continue to grow the company globally.”
Nektan broke even on an underlying (EBITDA) basis in the half year to June and remains on track to achieve a similar result for the full year, said Buckley.