LONDON (Alliance News) - IDE Group Holdings PLC said Wednesday that it has raised GBP2.0 million through the issue of loan notes to its major shareholders.
Shares in information technology services provider were up 24% at 13.67 pence on Wednesday.
Kestrel Partners LLP and MXC Capital Ltd, which holds a 22% stake, have subscribed for GBP750,000 each, while Salvators Lending Ltd subscribed for GBP500,000.
The loan notes are unsecured and have a three-year term with an annual coupon of 10%, payable yearly. Proceeds will go towards supporting IDE's working capital needs during its ongoing strategic and operational review expected to be completed in the third quarter of the year.
In addition, IDE said it has reached a full and final settlement of the branding claim from Coreix Ltd, and will pay damages of GBP250,000 over the course of 10 months along with GBP3,000 in costs.
In addition, IDE has appointed MXC Capital Chief Executive Officer Ian Smith in a part time executive capacity to lead a strategic review.
"Whilst the situation that IDE finds itself in is disappointing, I am pleased to be able to support the company alongside other shareholders whilst it undergoes a strategic review. Despite the poor cash performance of the business, we believe that there is marketable value in the underlying business activities and the focus will be on restoring shareholder value," said Interim Chairman Bill Dobbie.