Northbridge Industrial Services PLC – Placing of 2 million shares to raise £2.5 million
Northbridge Industrial Services Plc, the industrial services and rental company, today announces a placing of 2 million ordinary shares of 10 pence each to raise £2.5 million gross of expenses at a price of 125 pence per Placing Share with existing institutional shareholders. The Placing is not conditional on a general meeting.
Eric Hook, CEO of Northbridge, has subscribed for 23,631 Placing Shares in the Placing to the value of £29,539 and Western Selection Plc, of which David Marshall, a Non-executive Director of the Company, is non-executive chairman, has subscribed for 76,368 Placing Shares in the Placing to the value of £95,460.
Use of proceeds
Approximately £1.05 million (NZ$2.0 million) of the proceeds from the Placing will be used to pay the outstanding deferred consideration (the “Deferred Consideration”) due to the vendor of Tasman Oil Tools Limited and Tasman Oil Tools Leasing Limited.
This payment was originally due on 7 January 2016, but was deferred until 7 July 2018. The debt currently incurs an interest charge of 8 per cent. per annum, payable monthly.
The Deferred Consideration is secured on the Company’s property in New Zealand and, as a result of the repayment of the Deferred Consideration, the security on this property will be released.
The balance of the net proceeds of the Placing will be used as working capital in order to prepare for potential further investment in oil field rental equipment, if Northbridge’s oil and gas markets maintain their recovery.
Commenting on the Placing, Eric Hook, Chief Executive Officer of Northbridge said: “This placing of new equity, taken together with the issue of the convertible loan notes in April 2018, has been well supported by a number of our major shareholders. It ensures that we are in the best possible position to take advantage of a recovery in our markets and brings down our net gearing to below 20 per cent.”
Details of the Placing
The Company has raised £2.5million (before expenses) through the issue of the Placing Shares at the Placing Price. The Placing Price represents a discount of approximately 3.47 per cent. to the closing mid-market price of 129.5 pence per ordinary share on 19 June 2018, being the last business day prior to the publication of this announcement. The Placing Shares will represent approximately 7.17 per cent. of the enlarged share capital (excluding any treasury shares).
Pursuant to the terms of the Placing Agreement, Stockdale Securities Limited (“Stockdale”), as agent for Northbridge, has procured placees for the Placing Shares at the Placing Price.
The obligations of Stockdale under the Placing Agreement are conditional, inter alia, upon Admission having occurred by 8.00 a.m. on 22 June 2018 (or such later time and/or date as may be agreed, being no later than 31 July 2018), and there being prior to Admission no material breach of the warranties given to Stockdale.
Stockdale may terminate the Placing Agreement in specified circumstances (including for breach of warranty at any time prior to Admission, if such breach is reasonably considered by Stockdale to be material in the context of the Placing) and in the event of a force majeure event occurring at any time prior to Admission which will or may be materially prejudicial to the Company or to the successful outcome of the Placing. If the conditions of the Placing Agreement are not fulfilled on or before the relevant date in the Placing Agreement, placing monies will be returned to placees without interest as soon as possible thereafter.
Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on Friday 22 June 2018.
Total voting rights
Following Admission, the Company’s issued share capital will comprise 28,114,752 ordinary shares, including 215,150 ordinary shares held in treasury.
Therefore the figure of 27,899,602 ordinary shares should 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 in their interest in, the share capital of the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Following Admission, Eric Hook will hold 673,631 ordinary shares representing 2.41 per cent. of the Company’s enlarged share capital and Western Selection Plc will hold 3,300,000 ordinary shares representing 11.83 per cent. of the Company’s enlarged share capital.
Northbridge confirms that it will adopt the QCA Corporate Governance Code from 28 September 2018 in full, and will comply or explain in detail, any departure from that code and the reasons for doing so.