TIDMSWAP
RNS Number : 6695Y
MoneySwap Plc
06 March 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
6 March 2017
MoneySwap plc
("Moneyswap" or the "Company")
Fundraising update
Introduction
As set out in the Company's recent announcements, the Board of
Moneyswap has been in discussions with a number of parties over the
past nine months to secure long term funding for the Company.
The Company's shares were suspended from trading on AIM on 21
September 2016 for failure to publish its annual report and
accounts for the year ended 31 March 2016 (the "FY 2016 Results")
prior to 30 September 2016 and the Company's shares remain
suspended. Should the Company fail to publish its FY 2016 Results
and its half yearly results to 30 September 2016 (the "Interims")
and secure sufficient working capital for the Company going forward
within six months of the suspension date, trading in the Company's
shares on AIM will be cancelled.
The Company is pleased to announce that that it has today
entered into a loan agreement (the "Loan Agreement") with Wraith
Holding B.V ("Wraith"). In addition Wraith has entered into a
number of other agreements with the Company and certain of the
Company's existing creditors and shareholders (together, the
"Agreements"). The Directors believe that the Loan Agreement and
the other Agreements will provide the Company with sufficient short
term working capital so that it can complete its audit for the year
ended 31 March 2016, as well as progress a significant fundraise by
the Company (the "Potential Fundraising"). The Potential
Fundraising, if agreed, would be subject to the satisfaction of
certain conditions and would provide the Company with the working
capital it requires. Further details on the Loan Agreement and the
Agreements are set out below.
Wraith is a Netherlands based investment company wholly owned by
Mr Gilbert Armenta and incorporated for the purpose of investing in
Moneyswap.
Details on the Loan Agreement
The Company and Wraith have today entered into the Loan
Agreement, under which Wraith has provided a secured loan facility
to Moneyswap of USD 725,000. The Company has agreed to draw down an
initial USD 297,000 under the Loan Agreement, which has
predominantly been applied towards completing the Company's audit
for the year ended 31 March 2016 and finalising the Potential
Fundraising. Further draw-downs may be made under the facility at
the sole discretion of Wraith in order to meet the short term
working capital needs of the Company. Security has been provided by
various unconnected shareholders in Moneyswap by way of charge
agreements between Wraith and the unconnected shareholders over
ordinary shares in the Company held by the unconnected shareholders
representing 59.4% of the Company's existing share capital. The
beneficial interest and voting rights of the shares subject to the
charge agreements shall remain with the existing unconnected
shareholders and would only transfer to Wraith in the event of a
default under the Loan Agreement.
Amounts drawn down under the Loan Agreement by the Company carry
interest at 10% per annum and the arrangement fee for entering into
the Loan Agreement is 10% of the total amount drawn down under the
facility. Any amounts drawn down under the Loan Agreement will be
repayable on the earlier of:
a) the termination of the exclusivity agreement (further details of which are set out below);
b) two months after the date of cessation of negotiations over the Potential Fundraising;
c) completion of the Potential Fundraising; and
d) 30 June 2017.
The purpose of the Loan Agreement is to meet the immediate
working capital needs of the Company and the transaction costs
associated with the completion of the Potential Fundraising.
The Potential Fundraising
The terms of this Potential Fundraising are yet to be agreed
between the Company and Wraith but are expected to involve a
significant investment by Wraith, by way of a subscription for new
ordinary shares in the Company, which it is expected will represent
75% of the Company's enlarged and fully diluted share capital.
Exclusivity agreement
As a condition of the Loan Agreement, Moneyswap and certain
existing shareholders of the Company have today entered into an
exclusivity agreement with Wraith, which provide for Moneyswap to
cease discussions with other potential investors for a period of
six months in order that the Company and Wraith can progress the
Potential Fundraising.
Variation of terms with existing debt providers
The Company and Wraith have also today agreed to the variation
of terms of the following existing agreements with certain of the
Company's lenders:
i. Assignment of Leading Empire loan
Moneyswap has entered into an agreement with Leading Empire
Group Limited ("Leading Empire") and Wraith whereby Moneyswap has
consented to the proposed assignment, subject to and with effect
from completion of the Potential Fundraising, by Leading Empire, to
Wraith of the debt owing by Moneyswap to Leading Empire of USD
248,400. With effect from today, the agreement provides for the
conversion rights of Leading Empire attaching to the Leading Empire
debt to be cancelled and Leading Empire has agreed to forbear on
taking any action to recover any monies due to it until completion
of the Potential Fundraising.
ii. Assignment of Avance Development loan
Moneyswap has entered into an agreement with Avance Development
Corporation ("ADC") and Wraith whereby Moneyswap has consented to
the proposed assignment, subject to and with effect from completion
of the Potential Fundraising, by ADC, to Wraith of the debt owing
by Moneyswap to ADC of USD 781,748. With effect from today the
agreement provides for the conversion rights of ADC attaching to
the ADC debt to be cancelled and ADC has agreed to forbear on
taking any action to recover any monies due to it until completion
of the Potential Fundraising.
iii. Assignment of Changsha loan
Moneyswap has further entered into an agreement with Changsha
Zhangdian Investment Co., Limited ("CZI") and Wraith whereby
Moneyswap has consented to the proposed assignment, subject to and
with effect from completion of the Potential Fundraising, by CZI,
to Wraith of the debt owing by Moneyswap to CZI of USD 395,000. CZI
has agreed to forbear on taking any action to recover any monies
due to it until completion of the Potential Fundraising.
iv. Amendment to Broad Rivers loan
Moneyswap has entered into a deed of termination agreement with
Broad Rivers International Limited ("Broad Rivers") and Wraith (the
"BR Loan Variation") whereby the total amount due from Moneyswap to
Broad Rivers under the terms of Broad Rivers' loan to Moneyswap of
USD 100,000 shall be repaid at the later of 31 March 2017 or
completion of the Potential Fundraising. Under the BR Loan
Variation, Broad Rivers has agreed to forbear on taking any action
to recover monies due to Broad Rivers until this date.
As Broad Rivers is a substantial shareholder in the Company, the
entering into of the BR Loan Variation constitutes a transaction
with a related party under the AIM Rules for Companies. The
Directors of Moneyswap, having consulted with the Company's
nominated adviser, Allenby Capital Limited, consider the terms of
the BR Loan Variation to be fair and reasonable insofar as the
Company's shareholders are concerned.
Craig Niven, Interim CEO of Moneyswap, commented:
"I am pleased to be able to announce the involvement of Wraith,
which we hope will result in Wraith becoming a controlling
shareholder in Moneyswap. Wraith has a real vision as to how the
Company can be developed and the financial and management resources
necessary to achieve this vision. Moneyswap has been through a
difficult period in recent months and I am extremely grateful to
the support we have received from employees, counterparties,
shareholders, lenders and advisers during this time which has been
exceptional. I believe that this support will be rewarded with a
revitalized and successful business.
"Whilst we remain optimistic that we will be able to complete
the FY 2016 audit and the Potential Fundraising, to enable the
lifting of the suspension over the Company's ordinary shares, there
can be no guarantee that this will be successful."
- Ends-
For further information, please contact:
MoneySwap Plc Allenby Capital Limited
------------------------ ------------------------
Interim Chief Executive Nominated Adviser
------------------------ ------------------------
Craig Niven Nick Naylor
James Reeve
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+44 7767 497400 +44 20 3328 5656
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About Moneyswap (www.moneyswap.com)
Moneyswap provides payment solutions and gateways to merchants,
which allow both online and point of sale transactions to be
settled using UnionPay cards in the UK. In addition, UnionPay has
licensed Moneyswap for its MoneyExpress service, which enables
overseas persons to send funds directly to UnionPay cardholders in
China. The Company also offers an online peer-to-peer platform for
currency exchange and payments. The Company's shares are traded on
the London Stock Exchange's AIM market (AIM: SWAP). More
information can be found at www.moneyswap.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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