TIDMVLTY
RNS Number : 3974X
Veltyco Group PLC
19 December 2019
19 December 2019
Veltyco Group plc
("Veltyco", the "Company" and, together with its subsidiaries,
the "Group")
Convertible Loans
Potential Acquisition of Bet90
Directors' Loan Conversion
Issue of Equity
Veltyco Group plc (AIM:VLTY), the online marketing and operating
company for the gaming industry, is pleased to announce that it has
raised GBP500,000 (approximately EUR593,000) pursuant to a
subscription for convertible loan notes (the "December Convertible
Loan") by Mr Peter Paul Westerterp (the "Investor"). The Investor
owns approximately 5.1% of the Company's issued share capital and
is the holder of the, in aggregate, EUR300,000 convertible loan
notes issued in September 2019 (the "September Convertible Loan")
(further details of which are set out in the Company's announcement
of 16 September 2019). The terms of the September Convertible Loan
have been amended to match those of the December Convertible Loan
(together, the "Convertible Loans"), as set out below.
The Convertible Loans have a three-year term and a 5% annual
coupon, payable in arrears on 30 June and 31 December, with the
first instalment due to be paid on 30 June 2020. The Convertible
Loans are convertible at any time by the Investor at a price of 5p
per new ordinary share of no par value in the Company ("Ordinary
Share"). The Convertible Loans will automatically convert into
Ordinary Shares if the closing mid-market price of an Ordinary
Share is 10p or more for 25 consecutive business days. The
Convertible Loans are unsecured.
Under the Convertible Loans, the Company has GBP669,000
(approximately EUR793,000) outstanding as at the date of this
announcement, which is held by the Investor. The September
Convertible Loan and the December Convertible Loan are due for
repayment in September 2022 and December 2022 respectively.
Potential Acquisition of Bet90
The Company is pleased to announce that it has also entered into
a non-binding heads of terms (the "Heads of Terms") with Binbar
GmbH to acquire the 49% of Quasar Holdings Ltd ("Quasar") not
currently held by the Company (the "Potential Acquisition"). Quasar
wholly owns Bet90 Sports Ltd ("Bet90"), an online sportsbook and
casino gaming company. Veltyco currently holds 51% of the issued
share capital of Quasar and therefore, should the Potential
Acquisition complete, the Company will own 100% of Quasar.
The Heads of Terms sets out the consideration payable by Veltyco
in order to complete the Potential Acquisition, which is as
follows:
-- the issue of 5,000,000 new Ordinary Shares;
-- initial cash consideration of EUR200,000 (the "Cash Consideration"); and
-- ten monthly cash instalments of EUR30,000 (the "Monthly Instalments").
It is proposed that, subject to completion of the Potential
Acquisition, the proceeds of the December Convertible Loan will be
utilised to satisfy the Cash Consideration and provide general
working capital to the Group. The Board intendeds that the Monthly
Instalments will be paid out of the Group's operating cash flow. If
the Potential Acquisition does not complete, the proceeds of the
December Convertible Loan will be applied towards general working
capital purposes.
It is envisaged that on completion of the Potential Acquisition,
all of Bet90's terminal operations will be terminated, allowing
Bet90 to focus completely on online operations and expansion. The
termination of this operation will result in lower revenues, but
given it is loss making, the Board believes that it should improve
the net result of the business.
The Proposed Acquisition is subject to, inter alia, execution of
a share purchase agreement and other formal documentation, which is
expected to occur in shortly. There is no guarantee that the
Proposed Acquisition will complete or that the proposed terms will
not be amended. The Board will provide further updates as
appropriate.
Should the Potential Acquisition complete, the Directors believe
that it would be important step in the development of the Group's
new strategy, which is focused on regulated online sportsbook and
casino operations and expanding these operations in additional
territories. The Company is aiming to partner with external experts
and expand online operations, with a view to increasing marketing
efforts for brand recognition and driving additional traffic to the
platform.
The results for Bet90 are already consolidated into the Group's
accounts and for the year ended 31 December 2018, Bet90 had
revenues of EUR2.2 million and a loss of EUR3.1 million. In the six
months ended 30 June 2019, Bet90 had revenues of EUR1.6 million and
a loss of EUR0.6 million and as at 30 June 2019, had net
liabilities, excluding amounts due to the Company which are netted
off on consolidation, of EUR1.0 million, reflect the accumulated
losses.
Trading update
The Directors continue to manage the Group's cash resources
carefully, given, as previously announced the Group continues to be
reliant on being able to manage its creditor balance, which will
continue to exceed its cash resources following receipt of the
proceeds of the December Convertible Note. As a result, the
Directors continue to explore further appropriate sources of
capital.
In the event that trading in the short term is not in line with
the Board's revised expectations and/or the Group is not able to
manage its creditors and/or the Group continues to trade at a loss
and/or the Group is not able to secure further funding as outlined
above, the Group's ability to continue as a going concern and to
meet its liabilities will be materially impacted.
Directors' Loan Conversion
On 1 April 2019, the Company announced that three of its
Directors, being Paul Duffen, Marcel Noordeloos and Mark Rosman
(together, the "Conversion Directors"), had entered into loan
agreements pursuant to which each Conversion Director provided a
loan of EUR166,667 to the Company, totalling EUR500,000 (the
"Directors' Loans").
The Conversion Directors have entered into agreements to convert
their respective Director Loan into new Ordinary Shares
("Conversion Shares") at 5p per share. Following the conversion,
the Conversion Directors will have the following interests in the
Company:
% of the Company's
Existing Resulting issued share capital
number of Number of holding of as enlarged by
Conversion Ordinary Conversion Ordinary the Conversion
Director Shares Shares issued Shares Shares
Paul Duffen - 2,800,000 2,800,000 3.08%
----------- --------------- ------------ ----------------------
Marcel Noordeloos 859,954 2,800,000 3,659,954 4.03%
----------- --------------- ------------ ----------------------
Mark Rosman 183,798 2,800,000 2,983,798 3.28%
----------- --------------- ------------ ----------------------
Mark Rosman, Paul Duffen and Marcel Noordeloos as Directors of
the Company are deemed to be related parties of the Company
pursuant to the AIM Rules for Companies ("AIM Rules") and the
conversions of the Directors' Loans are therefore related party
transactions for the purposes of Rule 13 of the AIM Rules. Rainer
Lauffs, being the independent director for the purposes of the
conversions, considers, having consulted with Strand Hanson
Limited, the Company's nominated adviser, that the terms of the
conversions are fair and reasonable insofar as Veltyco's
shareholders are concerned.
Admission and total voting rights
Application will be made to the London Stock Exchange for the
Conversion Shares to be admitted to trading on AIM ("Admission").
It is expected that Admission will become effective and that
dealings in the Conversion Shares will commence at 8.00 a.m. on 24
December 2019.
Following Admission, the Company's total issued share capital
will consist of 90,889,492 Ordinary Shares with voting rights. The
Company does not hold any Ordinary Shares in treasury and
accordingly there are no voting rights in respect of any treasury
shares. The Conversion Shares will be fully paid and will rank pari
passu in all respects with the Company's existing Ordinary
Shares.
Paul Duffen, Executive Chairman of the Company, commented:
We are very pleased to have received the further support from
the Investor that has provided much needed working capital and
enabled us to enter into the Heads of Terms for the potential
acquisition of the remaining 49% of Bet90 we do not already
own.
"Should the Potential Acquisition complete, we believe that this
would be a crucial step in the roll-out of the Group's new
strategy, which is completely focused on regulated online
sportsbook and casino operations and expanding these operations in
additional territories. We are looking to partner with external
experts and expand online operations, with a view to increasing
marketing efforts for brand recognition and driving additional
traffic to our platform.
"There is still much to do and additional capital required, but
we are cautiously optimistic that the Group's new strategy will
ultimately deliver value for shareholders."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please contact:
Veltyco Group Plc +44 (0)1624 605 764
Paul Duffen, Executive Chairman
Marcel Noordeloos, Chief Financial Officer
Strand Hanson Limited (Nominated Adviser) +44 (0)20 7409 3494
James Harris / Richard Tulloch / James Dance
Whitman Howard Ltd (Broker) +44 (0)20 7659 1234
Nick Lovering / Christopher Furness
IFC Advisory (Financial PR & IR) +44 (0)20 3934 6630
Graham Herring / Tim Metcalfe / Zach Cohen
About Veltyco
Veltyco is a group of companies focused on the operation of its
own online Sportsbook and Casino product as well as marketing
activities for other online gaming companies.
Website: www.veltyco.com
PDMR Notifications
1. Details of the person discharging managerial responsibilities
/ person closely associated
a) Name 1. Paul Duffen
2. Marcel Noordeloos
3. Mark Rosman
-------------------------------- ----------------------------------
2. Reason for the Notification
--------------------------------------------------------------------
a) Position/status 1. Executive Chairman
2. Chief Financial Officer
3. Non-executive Director
-------------------------------- ----------------------------------
b) Initial notification/amendment Initial notification
-------------------------------- ----------------------------------
3. Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
--------------------------------------------------------------------
a) Name VELTYCO GROUP PLC
-------------------------------- ----------------------------------
b) LEI 2138007KWLZHV5I1A979
-------------------------------- ----------------------------------
4. Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv)each place where transactions have
been conducted
--------------------------------------------------------------------
a) Description of the Financial Ordinary Shares of no par value
instrument, type of instrument
-------------------------------- ----------------------------------
Identification code IM00BYT32K14
-------------------------------- ----------------------------------
b) Nature of the Transaction Conversion of loans into ordinary
shares in the Company
-------------------------------- ----------------------------------
c) Price(s) and volume(s) Share Price (GBX) Volume
1. 5 pence 2,800,000
----------
2. 5 pence 2,800,000
----------
3. 5 pence 2,800,000
----------
-------------------------------- ----------------------------------
d) Aggregated information N/A
* Aggregated volume
* Price
-------------------------------- ----------------------------------
e) Date of the transaction 19 December 2019
-------------------------------- ----------------------------------
f) Place of the transaction AIM, London Stock Exchange
-------------------------------- ----------------------------------
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END
IOECKFDKFBDDPBD
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