REG - Electric Guitar PLC - Placing to raise £775,000

Electric GuitarAnnouncement

18/06/2025 07:02

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250618:nRSR2658Na&default-theme=true

RNS Number : 2658N  Electric Guitar PLC  18 June 2025

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION IN IT, IS
RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, NEW ZEALAND, SINGAPORE OR ANY
OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE
UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED) ("EUWA")) ("UK MAR"). IN
ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF
CERTAIN OF THE MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT
THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED UNDER UK
MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING
ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.

18 June 2025

 

Electric Guitar PLC

("Electric Guitar" or the "Company")

 

Placing to raise £775,000

Appointment of Joint Broker

and

Total Voting Rights

 

The Board of Electric Guitar PLC (LSE: ELEG) is pleased to announce that it
has raised £775,000 (before expenses) by way of a placing (the "Placing") of
a total of 968,750,000 new ordinary shares of 0.01 pence each in the Company
("Ordinary Shares") at a price of 0.08 pence per new Ordinary Share (the
"Issue Price").

 

Transaction highlights

·      Placing to raise approximately £775,000 (before expenses)
through the issue of 968,750,000 new Ordinary Shares (the "Placing Shares") at
the Issue Price.

·      The Placing Shares have been placed with existing and new
investors.

·      The Placing Shares will represent approximately 44.66 per cent.
of the issued share capital of the Company, as enlarged by the issue of the
Placing Shares.

·      The estimated net proceeds of the Placing, which will be
approximately £730,000, will be used to fund the Company's anticipated costs
of an acquisition (which would be a reverse takeover under the AIM Rules for
Companies ("RTO")) and for general working capital.

Background to and reasons for the Placing

 

As an AIM Rule 15 cash shell under the AIM Rules for Companies (the "AIM
Rules"), the Company is required to make an acquisition or acquisitions which
constitute an RTO or seek re-admission to AIM as an investing company (as
defined under the AIM Rules) on or before 24 June 2025 (being the date falling
six months from the Company's re-classification as an AIM Rule 15 cash shell),
failing which the Company's Ordinary Shares would be suspended from trading on
AIM and the Company would then have a further six months to complete such a
transaction to preserve its admission to AIM.

 

As announced on 30 April 2025, following approval by creditors and members of
the Company Voluntary Arrangement on 27 March 2025, the Company has been
presented with a number of acquisition opportunities, the most promising being
in the energy and AI sectors. The Company has since been in active discussions
with potential acquisition targets for an RTO, but has not yet agreed terms,
and it is therefore expected that the Ordinary Shares will be suspended from
trading on AIM on 25 June 2025 as an RTO will not have completed by then.

 

The Placing has been undertaken to secure sufficient funds to finance the
Company's anticipated costs of an RTO and enable the Company to bring these
discussions to fruition. Further announcements will be made in due course as
matters progress.

 

Details of the Placing

 

A total of 968,750,000 Placing Shares are to be issued at a price of 0.08
pence per Placing Share. The Placing has been conducted utilising the
Company's existing share authorities to issue shares for cash on a
non-pre-emptive basis.

 

The Placing is conditional, inter alia, on admission of the Placing Shares to
trading on AIM becoming effective.

 

The Placing was completed by Novum Securities Limited ("Novum") pursuant to a
placing agreement (the "Placing Agreement") under which Novum has agreed to
use its reasonable endeavours to procure subscribers for the Placing Shares at
the Issue Price. The Placing Agreement contains certain warranties and
indemnities from the Company in favour of Novum. The Placing is not being
underwritten by Novum nor any other person.

 

The Placing Shares will represent approximately 44.66 per cent. of the
Company's issued share capital as enlarged by the Placing Shares. The Issue
Price represents a discount of approximately 11.11 per cent. to the closing
mid-market price of 0.09 pence per Ordinary Share on 17 June 2025.

 

The Placing Shares will be credited as fully paid and will rank equally in all
respects with the existing Ordinary Shares.

 

The Placing Shares have been placed with certain existing and new investors.
The Directors value the Company's retail shareholders, but due to the size of
the Placing and the cost of undertaking a retail offer, the Board determined
that it was not in the Company's interests to make the Placing available to
all existing shareholders. However, this will be kept under review should the
Company seek to raise further funds in the future.

 

Related party transaction

 

Sanderson Capital Partners Limited ("Sanderson Capital"), which currently
holds 166,546,025 Ordinary Shares representing 13.88 per cent. of the
Company's issued share capital, and Mayford 1TN Limited ("Mayford"), which
currently holds 350,000,000 Ordinary Shares representing 29.16 per cent. of
the Company's issued share capital, have agreed to subscribe for 187,500,000
Placing Shares and 187,500,000 Placing Shares, respectively, as part of the
Placing. As substantial shareholders of the Company, Sanderson Capital and
Mayford are defined as 'related parties' in accordance with the AIM Rules and
their participation in the Placing is a related party transaction pursuant to
Rule 13 of the AIM Rules. The Directors of the Company save for Sarfraz Munshi
(who is an employee of Sanderson Capital) consider, having consulted with the
Company's nominated adviser, that the terms of Sanderson Capital and Mayford's
participation in the Placing are fair and reasonable insofar as shareholders
are concerned.

 

Admission to trading of the Placing Shares

 

Application has been made to the London Stock Exchange plc for the Placing
Shares to be admitted to trading on AIM ("First Admission"). It is expected
that First Admission will become effective and that dealings in the Placing
Shares on AIM will commence at 8:00 a.m. on or around 20 June 2025.

 

Appointment of Joint Broker

 

The Company announces that Novum has been appointed as a Joint Broker to the
Company with immediate effect. To keep the Company's running costs low, it has
agreed to issue 37,500,000 new Ordinary Shares (the "Fee Shares") to Novum at
the Issue Price in lieu of its annual broking retainer fee. Accordingly,
application has been made to the London Stock Exchange plc for the Fee Shares
to be admitted to trading on AIM ("Second Admission"). It is expected that
Second Admission will become effective and that dealings in the Fee Shares on
AIM will commence at 8:00 a.m. on or around 23 June 2025.

 

Significant shareholdings

 

As a result of the issue of the Placing Shares and the Fee Shares, from Second
Admission, the Company is aware of the following revised interests of
Significant Shareholders (as defined in the AIM Rules) in the Company:

 

 Shareholder        Number of ordinary shares held from Second Admission  Previously disclosed position  Percentage of share capital held Second from Admission
 Mayford            537,500,000                                           29.16%                         24.36%
 Sanderson Capital  354,046,025                                           13.88%                         16.05%
 Grahame Cook       97,314,626                                            8.11%                          4.41%

 

Total voting rights

 

On First Admission, the Company's issued ordinary share capital will consist
of 2,169,043,699 Ordinary Shares, with one vote per share. The Company does
not hold any Ordinary Shares in treasury. Therefore, on First Admission, the
total number of Ordinary Shares and voting rights in the Company will be
2,169,043,699. With effect from First Admission, this figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.

 

On Second Admission, the Company's issued ordinary share capital will consist
of 2,206,543,699 Ordinary Shares, with one vote per share. The Company does
not hold any Ordinary Shares in treasury. Therefore, on Second Admission, the
total number of Ordinary Shares and voting rights in the Company will be
2,206,543,699. With effect from Second Admission, this figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.

 

 

Contacts:

 

 Electric Guitar PLC                                     info@electricguitarplc.com

 Richard Horwood

 Allenby Capital (Nominated Adviser and Joint Broker)    020 3328 5656

 Jeremy Porter / Piers Shimwell / Dan Dearden-Williams

 Novum Securities (Joint Broker)                         0207 399 9425

 Jon Belliss / Colin Rowbury

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IOEFLFFDRAIDLIE