TIDMPCGE
RNS Number : 3542O
PCG Entertainment plc
18 August 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR").
18 August 2017
PCG Entertainment Plc
("PCGE" or the "Company")
PCG Entertainment Plc / Index: AIM / Epic: PCGE
Fundraising
Highlights
-- Fundraising from institutional investors (the "Facility")
arranged by RiverFort Global Capital ("RiverFort")
-- Issue price under the Facility of 0.1 pence per new ordinary share
-- The Facility (which comprises a subscription of GBP1.0
million and an equity sharing agreement) to be used to fund the
Company's continuing operations, including general working capital
requirements
Richard Poulden, Chairman of PCGE, commented: "This is the first
stage in an overall funding relationship with RiverFort that can
lead to the funding of new deals at the project level. I have
worked with Brian Kinane, CEO of RiverFort, in the past and have
admiration for his skills in this area."
Brian Kinane, CEO of RiverFort, commented: "The potential of the
financing structure offered to PCGE by RiverFort should see success
for both parties. This initial facility offered by RiverFort
underlines our faith in PCGE's Board, expertise and strategy. The
innovative financing supports both the Company's growth and enables
RiverFort to benefit from PCGE's long term acquisition
strategy."
Summary
PCG Entertainment Plc (AIM: PCGE), announces that it has agreed
the Facility, which has been organised by RiverFort, and consists
of two parts. The first part is a subscription to raise GBP1.0
million, before expenses, (the "Subscription") by way of a
subscription for 1,000,000,000 ordinary shares of 0.1 pence each
(the "Ordinary Shares") by a syndicate led by D-Beta One EQ Ltd and
including Cuart Growth Capital Fund I (hereafter "the Syndicate")
at an issue price of 0.1 pence per Ordinary Share (the
"Subscription Shares"). The Subscription is conditional on
admission of the Subscription Shares to trading on AIM
("Admission").
Of the gross proceeds of the Subscription, GBP425,000 will be
retained by the Company and the balance of GBP575,000 will be
returned by the Company to the Syndicate pursuant to the second
part of the Facility, which is an equity sharing agreement (the
"Equity Sharing Agreement"). The Equity Sharing Agreement entitles
the Company to receive back those proceeds subject to a pricing
adjustment on a pro rata monthly basis over a period of 12 months.
It is also subject to adjustment upwards or downwards each month
depending on the Company's share price performance during the
previous month, as explained in more detail below. The Equity
Sharing Agreement provides the opportunity for the Company to
benefit from a positive future share performance. However, should
the Company's share price not perform positively, then the Company
will receive less than the amount it will return to the Syndicate
(subject to pricing adjustment) and, if its share price falls
substantially, the Company may have to return some or all the
proceeds of the Subscription to the Syndicate.
In no event will fluctuations in the Company's share price
result in any increase in the number of the Subscription Shares
issued by the Company or received by the Syndicate.
The Facility
Under the Subscription, the Syndicate will subscribe for
1,000,000,000 Subscription Shares at par, for a total gross
consideration of GBP1,000,000. The Subscription Shares will
represent 28.4 per cent of the enlarged ordinary share capital of
the Company. On completion of the Subscription, the Company shall
pay the Syndicate 57.5 per cent of the funds received under the
Subscription, i.e. GBP575,000, under the Equity Sharing Agreement
(details of which are set out below), with the Company retaining
GBP357,500 which is calculated after deducting the Company's
costs.
It is the Company's intention to use the retained proceeds from
the Subscription and any further receipts under the Equity Sharing
Agreement in the Company's continuing operations, including for
general working capital requirements.
The Equity Sharing Agreement
The Equity Sharing Agreement provides for a monthly payment to
be made by the Syndicate to the Company, being GBP47,916 for the
first 11 months and GBP47,924 in the twelfth and final month (the
"Monthly Payment"). This payment may be adjusted up or down
depending on whether the average of the lowest ten daily volume
weighted average prices of the Ordinary Shares during the relevant
month (the "Monthly Price") is above or below 0.11 pence per
Ordinary Share (the "Benchmark Price"). If the Monthly Price is
below the Benchmark Price, then the Monthly Payment is reduced
based on the following formula:
GBP47,916 - (83,333,333 Ordinary Shares x (Benchmark
Price-Market Price))
If the Monthly Price is above the Benchmark Price, then the
Monthly Payment is increased based on the following formula:
GBP47,916 + (83,333,333 Ordinary Shares x (Market Price-
Benchmark Price) x 0.75)
Note: The Monthly Payment and number of Ordinary Shares used in
the above calculations will be GBP47,924 and 83,333,337
respectively in the twelfth and final month.
The Company intends to announce its monthly receipts under the
Equity Sharing Agreement.
Admission and Total Voting Rights
An application will be made to admit the Subscription Shares to
trading on AIM. Admission is expected to occur on or around 23
August 2017.
Following Admission, the Company's issued share capital will
consist of 3,524,940,507 Ordinary Shares, with one voting right per
share. PCGE does not hold any Ordinary Shares in treasury.
Therefore, the total number of Ordinary Shares and voting rights in
the Company will be 3,524,940,507. This figure may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company.
For more information on PCGE please visit the Company's website
www.pcge.com.
Enquiries:
PCG Entertainment PLC
Richard Poulden, Chairman Tel: +44 207 812 0645
Allenby Capital Limited
Nick Naylor/Nick Harriss/James Thomas Tel: +44 20 3328 5656
Beaufort Securities Limited
Elliot Hance Tel: +44 20 7382 8300
Damson Communications
Abigail Stuart-Menteth/Amelia Hubert Tel: +44 20 7812 0645
Further Information on the Subscription and Equity Sharing
Agreement
The Subscription
The Company has raised, conditional of Admission, GBP1,000,000
(before expenses) through the issue of 1,000,000,000 Ordinary
Shares at a price of 0.1 pence per share.
The Subscription is conditional on Admission of the Subscription
Shares to trading on AIM occurring on or before 8.00 a.m. on 23rd
August 2017 (or such later time and/or date as the Syndicate and
the Company may agree, being not later than 8.00 a.m. on 31st
August 2017).
The Company has agreed to pay the Syndicate certain commissions
and fees in connection with the Subscription. Under the terms of
the Subscription Agreement, the Company has given certain
warranties and indemnities to the Syndicate in connection with the
Subscription and other matters relating to the Company and its
affairs.
The Subscription Shares will, when issued, represent
approximately 28.4 per cent of the enlarged issued share capital of
the Company following Admission. The Subscription Price represents
a premium of approximately 17.6 per cent to the closing mid-market
price of 0.085 pence for an existing Ordinary Share on 17 August
2017, the trading date prior to the announcement of the
Subscription.
The Equity Sharing Agreement
The Company has entered into the Equity Sharing Agreement,
pursuant to which, subject to the conditions therein and provided
that the Company has received the subscription monies payable
pursuant to the Subscription Agreement, the Company will pay an
amount equal to 57.5 per cent of the gross proceeds of the
Subscription to the Syndicate. The Equity Sharing Agreement will
enable the Company to share in 75 per cent in any share price
appreciation over the Benchmark Price. However, if the Company's
share price remains less than the Benchmark Price then the amount
received by the Company under the Equity Sharing Agreement will be
less than the 57.5 per cent of the gross proceeds of the
Subscription which are to be returned by the Company to the
Syndicate at the outset.
The Equity Sharing Agreement provides that the Company will
receive 12 approximately equal monthly settlement amounts as
measured against the Benchmark Price. The monthly settlement amount
for the Equity Sharing Agreement is structured to commence on 30
September 2017.
Should the Market Price be below the Benchmark Price, the
Company will receive less than 100 per cent of the monthly
settlement calculated on a pro rata basis and the Company will not
be entitled to receive the shortfall at any later date. If the
Market Price exceeds the Benchmark Price the Company will receive
the Monthly Payment plus 75 per cent of the excess of the Market
Price over the Benchmark Price. There is no upper limit placed on
the additional proceeds receivable by the Company as part of the
monthly settlements and the amount available in subsequent months
is not affected.
For example, if on the monthly settlement date, the Market Price
is below the Benchmark Price by 10 per cent, the settlement on the
monthly settlement date will be 90 per cent of the amount due on
that date. If on a monthly settlement date the calculated Market
Price exceeds the Benchmark Price by 10 per cent, the settlement on
that monthly settlement date will be 107.5 per cent of the amount
due from the Syndicate on that date.
Assuming the Market Price equals the Benchmark Price on the date
of each and every monthly amount, the Company would receive
aggregate proceeds of GBP1,000,000 (before expenses) from the
Facility.
It is possible that in certain circumstances the Company may not
receive the monthly settlement amount referred to above under the
Equity Sharing Agreement and could in fact be liable to make cash
payments to the Syndicate but in no circumstances can the Company's
liability to make payments to the Syndicate on account of the
adjustments referred to above exceed the amount of GBP425,000.
The Company will pay the Syndicate a legal fee, a Due Diligence
fee and the Syndicate's legal costs incurred in the
Subscription.
Under the terms of the Equity Sharing Agreement, the Company has
given certain warranties and indemnities to the Syndicate in
connection with the transactions contemplated therein and relating
to the Company and its affairs.
In no event will fluctuations in the Company's share price
result in any increase in the number of the Subscription Shares
issued by the Company or received by the Syndicate.
END
This information is provided by RNS
The company news service from the London Stock Exchange
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