Zinc Media Group (ZIN) announced on Friday a proposed placing of £3.5 million via an accelerated bookbuild, and a 1 to 500 share consolidation.
The placing is conditional on approval from Zinc’s shareholders, and would represent a 165% increase in issued share capital if all of the shares are placed.
Zinc’s placing at 0.18p per share, represents a 23.4% discount from the day before, and told investors that Herald Investment Management, its largest shareholder, indicated its support for the placing.
The TV and multimedia content producer said the proceeds will fund its transformation plan led by a new management team to prioritise improved margins and diversified revenue, service existing debt and general working capital purposes.
Mark Browning, CEO, and Will Sawyer, CFO, joined the Group in April 2019 and October 2018, who both led the turnaround of ITN Productions transforming it into one of the top independent production companies in the UK.
Shares were 21.28% lower at 0.185p during Friday morning trading
Mark Browning, CEO, commented: "I am delighted that our existing shareholders, supported by significant new investors, have backed the Group's transformation plan.”
He added: “This placing will allow Zinc to invest in the plan and enable the Group to deliver future profits following a period of transition."
Zinc said to shareholders that although it generates healthy revenues, particularly in television, it is currently loss making due to lack of scale, and revenues are susceptible to peaks and troughs.
For the results ending 30 June 2019, Zinc reported EBITDA of £130,000 on revenues of £24,630,000.
In the same announcement, Zinc said it agreed with Herald to convert its remaining preference shares into the placing and convert some of its debt owed to Herald director and substantial shareholder John Booth into placing shares.
Follow News & Updates from Zinc Media here: