FAIRFX Group plc (LON:FFX) the international payments provider, has today announced that is has conditionally raised approximately £1.5 million net of expenses through the proposed placing of 5,309,965 new ordinary shares at 31 pence per ordinary share (“Placing Price”) with existing and new institutional shareholders. The net proceeds of the Placing will be used to continue the trend of growing the Group’s customer base and will strengthen management’s position with the strategic re-launch of its Corporate Card solution.
The Placing Shares will represent approximately 6.9 per cent. of the Enlarged Share Capital and will, when issued, rank in full for all dividends declared, made or paid after the date of their issue and otherwise pari passu with the existing Ordinary Shares. The Placing Price represents a premium of approximately 3 per cent. to the price of 30 pence per Ordinary Share, being the Closing Price of the Company’s Ordinary Shares on 10 November 2015.
In addition, Pembar Limited (“Pembar”) has irrevocably subscribed for 1,080,264 new Ordinary Shares at the Placing Price. Pembar previously made a loan (carrying interest at a rate of 2 per cent. per annum over the Bank of England base rate) available to a subsidiary of the Company on 9 June 2006, in the principal sum of £337,500, of which a sum of £334,882, in aggregate, remained outstanding (the “Loan”). This conversion removes all outstanding shareholder loans. Pembar has agreed that the issue and allotment to Pembar of the Subscription Shares, conditional only upon the admission of the Subscription Shares and the Placing Shares to trading on the AIM market of the London Stock Exchange plc (“AIM”) becoming effective, shall be in full and final satisfaction of all amounts outstanding under the Loan, including all interest accrued thereon (if any).
Cenkos Securities plc has entered into the Placing Agreement with the Company whereby it has agreed to use its reasonable endeavours, as agent for the Company, to procure placees for the Placing Shares. The Placing is conditional on, inter alia, the Placing Agreement becoming or being declared unconditional in all respects and not being terminated before Admission and on Admission of the Placing Shares to AIM.
Application has been made to the London Stock Exchange plc for the Placing Shares and the Subscription Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares and Subscription Shares will commence on AIM on 13 November 2015. On Admission, the enlarged share capital of the Company is expected to be 76,866,039 Ordinary Shares.
Interim Period End Balance Sheet Reclassification
It has come to the Board’s attention that the Company’s interim balance sheet as at 30 June 2015 reported the Company’s forward contracts on a gross value basis rather than net realisable value. This meant that both “Trade and other receivables” and “Trade and other payables” were each overstated by £8,079,203. The reclassification has no impact on the Company’s net asset position and its profit and loss statement for the period, both of which remain unchanged at £0.122m and £-2.062m respectively. Trade and other receivables for the period have been changed to £5.617m and Trade and other Payables to £11.622m.
Ian Strafford-Taylor, Chief Executive of FAIRFX Group Plc commented, “Following a summer of strong growth, we are pleased with the further support from our shareholders, both existing and new, which enables us to continue to pursue our stated growth strategy. As announced in the Company’s interim results dated 29 September 2015, at over £30 billion*, the market size for UK Corporate Expenses is comparable to the UK travel money market of £35 billion* and hence represents a great opportunity for FAIRFX. The FAIRFX Corporate Card expense solution is a unique platform and will enable us to use disruptive technology to compete head-on with the charge-card offerings which currently predominate. We will use a similar model of targeted marketing spend allied to technical innovation for the Corporate Card market as we have already proven with our results for the retail card. We are extremely excited both by the potential for this market and our product capabilities within it.”