12:39 AM, June 12 2017
K3 Business Technology Plc. fell by over 4.5% on the bourses post the company announced that it has proposed placing of 5,353,214 New Ordinary Shares at 140 pence per share and Open Offer of up to 719,984 New Ordinary Shares at 140 pence per share. Through placing, the company would raise up to £7.5 million before expenses at a price of 140 pence per share. The placing would be conducted through an accelerated book build process which will open with immediate effect following this announcement. However, the proceeds of the placing and open offer would be used to strengthen the balance sheet and provide additional working capital. Also, additional £0.7 million cash being invested in K3 through exercise of warrants by Johan Claesson.
The CEO of the company,Adalsteinn Valdimarsson commented on the same, “As we have reported previously, we are now engaged in a review of the Group's resources. The objective of this review is to refocus K3's growth strategy around its cash generating business units and the Group's large SME customer base. This proposed placing and open offer to qualifying shareholders will strengthen the Group's balance sheet and provide additional working capital during this review and enables us to operate with full flexibility as we make strategic decisions. The Group is undergoing transition but we believe the strategic steps we are taking create a solid platform for future growth. We remain encouraged by the underlying strength and performance of K3's profitable business units which generate significant recurring revenues and cash flows from our large SME customer base. We are also pleased with the pilot project underway for our new cloud-based modular technologies, which we expect to generate opportunities with both new and existing customers. We have also announced a number of changes to the composition of K3's board today, including the retirement of Chairman David Bolton and the appointment of Chief Financial Officer, Rob Price, to the Board. We would like to thank David Bolton for his significant contribution and counsel to K3 over almost 20 years. He has shown a high level of commitment and dedication to the Company during this time and we wish him well in his retirement. Non-executive Director, Stuart Darling, will hold the role of Chairman on an interim basis, while the Board undertakes a recruitment process. We will report on the results of the placing and open offer in due course”.