nmcn is pleased to announce entry into a refinancing arrangement whereby the Company will be fully re-capitalised through an equity raise of £24 million to £29 million and a new banking facility of £7.5 million to £8.5 million.
This new financing package will not only satisfy short term funding requirements but gives a clear path to providing the Group with appropriate and sustainable financial foundations from which to address the significant opportunities that exist in its focused markets.
Under the arrangement agreed, the Company will receive an immediate £10.0 million capital injection by way of a convertible bridging loan from Svella Plc, that will convert into new ordinary shares on completion of the overall transaction. A further equity fund raising of up to £19 million will consist of £14 million from new investors, including Svella Plc, who will consequently have a controlling stake in the Company, and up to £5 million via an open offer to existing shareholders. The Company has received irrevocable undertakings from a majority of shareholders to approve the transaction at a general meeting.
The new banking facility will be provided by the Group’s existing bank, Lloyds, consisting of a £5 million – £6 million committed revolving credit facility and a £2.5 million term loan.
Svella Plc was established in 2018 to identify and acquire controlling stakes in attractive but underperforming businesses and assets. It seeks to improve performance through operational improvement, an unwavering focus on financial performance, hands-on investment and proactive management. The company is led by two highly experienced entrepreneurs, Andrew Tinkler and Ben Whawell, former executives of Stobart Group with a strong track-record in several sectors, including contracting, infrastructure and development.
The Board confirms that the Executive directors of the Company will remain in place led by the new CEO Lee Marks and CFO Alan Foster. It is the intention to appoint a new independent non-executive director and a further announcement will be made in due course.
In addition to the consequences of the COVID-19 pandemic for both the Company and its stakeholders, the last 12 months have been a challenging period with several senior management changes and a number of operational issues. In addition, the Company initiated in Q4 2020 an exercise to secure a financing package more appropriate to the size and nature of the Group’s business and risk profile and today’s announcement is a culmination of this work.
Notwithstanding the issues identified in the Company’s most recent trading update to the investment community, nmcn’s chosen markets continue to offer multiple opportunities to successfully deploy the experience and expertise within the organisation.
Lee Marks, recently appointed Chief Executive, commented:
“The last 18 months have been difficult for many individuals and many businesses. I would like to thank sincerely both our suppliers and customers who have worked with us through the challenges faced by both nmcn and the wider market.
I would also like to thank all my colleagues within the business who have continued to deliver for our customers and those led by our CFO who have striven to deliver the appropriate financial structure for the future.
I joined nmcn in early May 2021 because I believed it was a company that was well positioned in its key markets and had the potential to successfully and profitably address the opportunities within them. I remain of that view and today’s news enables us to now look forward.
We have much to do and we need to learn from our past mistakes, however, with the appropriate financial foundations and support of our new investors in place, I look forward to leading the business into a new chapter.”