EServGlobal raises £24m to push forward HomeSend joint venture

EServGlobal announced the successful completion of the institutional component of its 1-for-3 non-renounceable entitlement offer on Friday, which it first announced on Wednesday, alongside a firm placing to institutional investors.

The AIM-traded firm said the institutional offer would raise approximately £15.8m from subscriptions for new fully-paid ordinary shares in the company at 9p, and the firm placing would raise approximately £4.8m from subscriptions for new fully paid new ordinary shares.

It added that the retail offer would raise a further £3.4m for the company at the issue price.

The net proceeds from the fundraising would be used in part to fund an expected capital raise by the HomeSend joint venture, to fund its short-term cash requirements and provide further capital for future cash calls, therefore enabling the company to maintain its 35% ownership in HomeSend.

It added that the proceeds would also be used to further support the rationalisation exercise within the core business, pay down all the company's debt to strengthen the balance sheet and for general working capital purposes.

The fundraising was structured to allow the company to receive the proceeds as quickly as possible, the board explained, in order to begin implementing its strategies and without the need for shareholder approval.

“I am delighted with the support we have received from institutional investors who recognise the strong progress HomeSend is making in their potentially enormous market as well as the opportunities for the core business,” said eServGlobal executive chairman John Conoley.

“I am also pleased that we are able to provide retail investors the opportunity to participate in the fundraising.”

Conoley said HomeSend was building momentum in the global payments market, and was now poised to realise the “significant opportunities” before it.

“As we announced in a trading update on 10 October, we expect the core business to achieve EBITDA breakeven in the fourth quarter of 2017 as we continue the structural changes to the business.

“A proportion of the fundraising will be used to complete the restructure as well as pay down debt.

“This is an exciting time for eServGlobal as we make further progress towards realising the group's potential.”