Technology investor Tern announced on Thursday that it had raised £1.5m before expenses to improve its investment negotiating position, repay short-term debt, and for general working capital.
The AIM-traded firm raised the funds through a subscription for 15 million new shares at a price of 10p each, conditional on admission to AIM.
It said the subscription shares would represent 3.86% of its enlarged issued share capital, with the price representing a discount of 14.9% to its mid-market closing price on 7 December.
The subscription was undertaken with a single UK-based FCA-regulated unnamed institutional investment fund management firm, which subscribed on the understanding that Tern would use part of the net proceeds to repay the outstanding £0.4m loan facility, and retain the benefit of the Wyld Network’s AB shares, currently subject to a call option.
The subscriber additionally agreed to work with the company to assist in maximising shareholder value from Tern’s existing investments.
“The directors intend that the net proceeds of the subscription will be used to provide Tern with a stronger negotiating position and with funding for follow-on investment opportunities in future syndicated fundraises performed by Tern’s existing portfolio companies,” the board said in its statement.
“[They will also be used] to repay the £0.4m short-term loan facility and applicable interest entered into by the company in July.
“On repayment of the loan it is intended that the facility provider’s call option on 320,455 shares in Wyld Networks AB will be cancelled, enabling the company to continue to benefit from this holding.”
Tern’s directors also said the money would be used for general corporate purposes.