Pittards, a London-listed manufacturer of specialty-leather goods for retailers, announced on Tuesday its intention to raise up to £1.85 million through management share subscriptions and a shareholder open offer.
In order to continue trading, Pittards needs to raise a minimum of £1.16 million. Failure to do so could result in the company being placed into administration, with shareholders receiving little or no value in return.
The open offer will be conducted at a price of 4.0 pence per share, representing a discount of 26% compared to the closing price of 25.6 pence before shares were suspended. Shareholders who accept the offer will have the opportunity to purchase up to 43.1 million discounted shares, with a ratio of three new ordinary shares for every one held.
Additionally, members of the management team will contribute £125,000 at the issue price.
The success of the fundraising is contingent upon Pittards securing a previously announced banking facility worth £10.45 million, as well as obtaining shareholder approval during a general meeting scheduled for July 27.
Pittards is currently engaged in discussions with a trade investor regarding a potential investment, although there is no guarantee that an agreement will be reached.
Any funds raised beyond the £1.16 million minimum target will be allocated towards a £340,000 overdraft and providing additional working capital for the company.
