PAYNOVA CONDUCTS GUARANTEED PREFERENTIAL SHARE ISSUE OF SEK 25 MILLION
(NGM:PAY)
The Board of Directors of Paynova AB will propose an extra general meeting, in order to adopt a resolution for a preferential share issue. The new share issue will provide the company with SEK 25 million when fully subscribed. This is expected to fulfill the company’s needs for capital until a positive cash flow is achieved by the third quarter of 2009 at the latest. The share is secured in its entirety through subscription commitments and guarantees. An invitation to the extra general meeting will be published shortly.
Paynova’s financing plan has been affected by the turbulence on the financial market, which in turn has impacted the development of the company’s share price. The financing plan was founded on with the share issue conducted in the summer of 2008, together with capital from operating activities as well as the option rights TO 8 (October 2008) and TO 6 (January 2009). Combined, these measures should have raised sufficient capital until the company achieved a positive cash flow. The concerns on the financial market and the subsequent change in share price meant that capital from TO 8 and TO 6 were not received as planned. Sufficient capital has thus far been procured through short-term running bridge-financing, which is intended to be converted into shares after a decision concerning the share issue at the next extra general meeting.
In the interim report January-June 2008 it was noted that ongoing negotiations with a number of larger customers were expected to generate a strong transaction growth with considerable income increases. During October it was then announced that Paynova and SJ will expand their existing cooperation to include card payments with revenues of approximately SEK 200 million per month. For Paynova the expanded cooperation will bring a considerable increase in transaction volume, thus having a significant impact on profits. These cash flows and other previously stated sources of transaction growth and revenue-increasing events now comprise the foundation for the supplementary financial plan under which the need for capital until a positive cash flow is reached is estimated at SEK 25 million.
As a result of the positive development in Paynova’s operating and marketing activities, the need for capital is less than what was previously estimated and communicated. The liquidity resulting from the share issue will therefore provide the company with sufficient capital in excess of that derived from operating activities, up until the estimated time for achieving a positive cash flow on a monthly basis, by the third quarter of 2009 at the latest.
The Board of Paynova AB will propose and soon publish an invitation to an extra general meeting, which will adopt a resolution regarding the preferential share issue. The new share issue is proposed at a course of SEK 0.65 per share. Ten (10) existing shares will provide the right to subscribe to nine (9) new shares. Under these proposed conditions, the share issue will, when fully subscribed, provide the company with SEK 25, 262, 623.10 before deductions for issue costs.
Shareholders in Paynova have, together with a number of physical and legal parties, made subscription commitments or guaranteed subscription for about SEK 25 million, corresponding to the amount for full coverage. Approximately 40 percent or SEK 10 million are commitments from existing shareholders. The shareholders in Paynova, who together represent more than 60 percent of outstanding votes and capital, are positive towards the new issue, and intend to vote in favor of the Board’s proposal.
Complete terms as well as a detailed schedule for the new share issue will be published in connection with the invitation to the extra general meeting. Stockholm Corporate Finance AB is the financial advisor in connection the preferential share issue.
Paynova’s activities and prerequisites in general are presented in Företagspresentation (in Swedish) which can be found under news at www.paynova.com.
For more information please contact:
Lars Guldstrand Chairman of the Board at Paynova
Tel: +46 70 528 81 81