UK risk management vendor Raft International has agreed a deal with investment fund Brittany Capital Management that could lead to an injection of £1 million in working capital in return for a 23.2% stake in the company.
Under the terms of the agreement, BCM has agreed to subscribe for new ordinary shares up to a value of £1 million, via a block admission of up to 20 million Raft shares of 5 pence each. BCM, an investment fund of Connectivut-based Southridge Capital Management, will be obliged to take up the offer, providing that its aggregate shareholding does not exceed 4.9% of Raft's issued share capital. Raft may draw against the facility at any time until 24 August 2008.
Raft shares have drifted to new yearly lows since the company posted disappointing first half results in July and lowered second half guidance.
David Priestley, executive chairman of Raft, says the new facility provides "an ability to execute an increased number of strategic options."
Shares in the vendor ticked up 6.2% on the news to 7 pence per share.