TIDMSWAP
RNS Number : 0524D
MoneySwap Plc
01 July 2016
1 July 2016
MoneySwap plc
("MoneySwap" or the "Company")
Fundraising update, proposed board changes, and extension to
short-term loan
The Company announces that it is progressing a fundraising to
raise approximately US$5.4 million through an issue of new ordinary
shares in the Company of 0.1p nominal value each (the "Ordinary
Shares") and that it has agreed, subject to contract and due
diligence, outline terms with a new investor.
Proposed subscription
The Company has reached preliminary agreement, subject to
contract, with the Hunan Commodities Trading Centre Company Limited
("HNCX") under which it is proposed that HNCX will subscribe for
approximately US$5.4 million of new Ordinary Shares in the Company
(the "Proposed Subscription").
Under the Proposed Subscription it is intended that HNCX will
subscribe for a total of 2,724,970,131 new Ordinary Shares at a
price of US$0.0019817 per new Ordinary Share (the "Subscription
Price"). It is currently planned that the Proposed Subscription
will comprise:
a) a proposed initial subscription by HNCX for 842,721,933 new
Ordinary Shares at the Subscription Price, which would result in
the Company receiving approximately US$1.67 million at completion;
and
b) HNCX committing irrevocably to subscribe for a further
1,882,248,198 new Ordinary Shares at the Subscription Price in 6
tranches over the 9 months following completion. These subsequent
subscriptions would result in the Company receiving approximately
US$3.73 million from HNCX.
If completed, the Proposed Subscription would result in the
Company issuing 2,724,970,131 new Ordinary Shares and raising
approximately US$5.4 million, before expenses.
HNCX is a privately owned company based in Hunan province in the
People's Republic of China. It is controlled by two families with
various business interests including in the property and textiles
sectors. If the Proposed Subscription proceeds, it is intended that
HNCX and the Company will agree the terms of a relationship
agreement reflecting the substantial nature of HNCX's equity
interest in MoneySwap and a 12 month lock-in agreement in respect
of all new Ordinary Shares subscribed for by HNCX.
Should the Proposed Subscription be completed, HNCX will own
shares representing approximately 61% of the Company's issued share
capital (as enlarged by the Proposed Subscription and the issue of
new Ordinary Shares by the Company to certain creditors, directors,
a former director and a substantial shareholder, details of which
are set out below).
Proposed agreements with certain creditors of the Company
In addition to the Proposed Subscription, the Company is
currently undertaking equity for debt discussions with certain
creditors of the Company. Any equity for debt swaps will be
conditional on the Proposed Subscription proceeding.
Leading Empire Group Limited ("LEG") has agreed, conditional on
the Proposed Subscription completing, to convert US$0.171 million
of the US$0.24 million of principal and accrued interest on its
convertible loan notes in the Company (the "LEG CLNs") into new
Ordinary Shares at the Subscription Price.
Advance Development Corporation ("ADC") has agreed, conditional
on the Proposed Subscription completing, to convert US$0.529
million of the total of US$0.744 million principal and accrued
interest on its convertible loan notes in the Company (the "ADC
CLNs") into new Ordinary Shares at the Subscription Price.
The remaining balances of the LEG CLNs and the ADC CLNs will
continue to exist as convertible loan notes in the Company on the
following terms:
i) interest will accrue on the remaining balance of the LEG CLNs
and the ADC CLNs, respectively, at 10% per annum, payable annually
in arrears;
ii) unless converted, the LEG CLNs and the ADC CLNs,
respectively, will be redeemed in full on 30 June 2018 ; and
iii) from 30 June 2017, MoneySwap will have the option to either
redeem or to force conversion of the LEG CLNs and/or the ADC CLNs
at any such time. In the event of MoneySwap electing to redeem or
force conversion of the LEG CLNs and/or the ADC CLNs, the
conversion price will be at a 10% discount to average closing
mid-market price of the Ordinary Shares for the ten business days
immediately prior to such conversion.
In addition, Mr Alan Lau has agreed, conditional on the Proposed
Subscription completing, to reschedule the redemption dates of the
principal and accrued interest on the US$1.05 million due to him
from the Company in a manner consistent with the projected cash
flows of the Company going forward.
Proposed board changes
Should the Proposed Subscription complete, three of the existing
directors of the Company (being Sunny Yu, Emma Xu and Javier Amo)
intend to resign from the Board and three new directors will be
appointed, including a new CEO.
HNCX have made it a condition of their participation in the
Proposed Subscription that all unpaid fees due to the current
directors, a former director and a substantial shareholder of the
Company, which total US$0.38 million, will be settled by the
Company issuing new Ordinary Shares to the directors, the former
director and the substantial shareholder at the Subscription Price
(the "Fee Conversion Shares"). It is envisaged that the directors
and former director will agree to cancel all existing and unexpired
options over ordinary shares in the Company.
Any arrangements with the current directors, the former director
and the substantial shareholder will be deemed related party
transactions under the AIM Rules for Companies. It is envisaged
that any Fee Conversion Shares issued to the directors and the
former directors will subject to a twelve-month lock-in period.
Next steps
The Proposed Subscription and the arrangements with creditors,
directors, the former director and the substantial shareholder set
out above are subject, inter alia, to:
a) the execution of a subscription agreement between the Company
and HNCX and completion of associated documentation;
b) approval of the Proposed Subscription and the other
arrangements by the board of the Company; and
c) completion of certain due diligence and anti-money laundering
checks by the Company and its advisers.
In the event that the Proposed Subscription does not proceed the
board of MoneySwap believe that it is unlikely that the Company
would be able to continue to trade.
Extension to Short-term Loan
MoneySwap has received a further US$18,000 under an extension to
the loan facility (the "Short-term Loan") from Changsha Zhangdian
Investment Company Limited (the "Lender"), further details of which
were announced by the Company on 9 May 2016 and 16 June 2016. The
Company has now drawn down US$218,000 from the Lender, comprising
the full US$200,000 available under the Short-term Loan and the
US$18,000 pursuant to the Short-term Loan's extension.
The monies received from the Lender are being applied by
MoneySwap principally in meeting the various legal and regulatory
costs associated with the Proposed Subscription.
- Ends-
For further information, please contact:
MoneySwap Plc Allenby Capital MoneySwap Plc
Limited
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Non-Executive Nominated Adviser Financial PR
Chairman
---------------- ------------------ -----------------
Craig Niven Nick Naylor Fiona Fenn Smith
James Reeve
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+44 7767 497400 +44 20 3328 5656 +44 7712 101922
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About MoneySwap (www.moneyswap.com)
MoneySwap provides payment solutions and gateways to merchants,
which allow both online and point of sale transactions to be
settled using UnionPay cards in the UK. In addition, UnionPay has
licensed MoneySwap for its MoneyExpress service, which enables
overseas persons to send funds directly to UnionPay cardholders in
China. The Company also offers an online peer-to-peer platform for
currency exchange and payments. The Company's shares are traded on
the London Stock Exchange's AIM market (AIM: SWAP). More
information can be found at www.moneyswap.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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July 01, 2016 11:50 ET (15:50 GMT)
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