LCG proposes £10.7m placing to continue Sabet's laboured restructuring

21st Jun 2016 14:02

(ShareCast News) - London Capital Group has proposed a £10.7m equity fundraising, with chief executive Charles-Henri Sabet GLIO vehicle eyeing an 80% stake in the company to replace earlier loans to the spread betting provider.Sabet, the Swiss banker who first invested in LCG in 2014 and later that year became executive chairman, said in a letter to shareholders that the placing of 215.25m new shares at 5p each was the "only realistic route" to providing what he feels is a necessary increase in Tier 1 capital to support current activities and anticipated future growth.GLIO is subscribing for 195.6m of the new shares, which will see its stake in LCG jump from around 20% to more than 80% as the fundraising repays £8.2m of convertible loan notes (CLNs) owed to GLIO as the notes are convertible into stock at a price of 25p per LCG share."The company has considered raising additional equity from new investors, by way of a placing of new shares at a discount to the company's prevailing share price. The company has approached various potential new investors with regard to such investment," the statement said."However, as a consequence of the company's financial and share price performance... this has been without success."At the end of 2015, LCG's common equity tier 1 capital was £8.4m, after the financial restructure, this will be increased to £12.7m.Since the beginning of 2015, LCG's shares have collapsed from 42p to almost 5p, as prior profits swung into losses.Sabet claims his efforts to restructure have taken longer than expected, hampered by external factors such as the surprise Swiss National Bank exchange rate move in January last year.But many of the Swiss's hires have jumped ship in recent months, including head analyst Brenda Kelly, head of marketing Ollie Rosewell, together with heads of sales trading, compliance, legal and chief operating officer all departing in 2016, Digital Look understands.By mid-afternoon on Tuesday the shares were down 7.6% to 5.16p.