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Northbridge raises £2.5m to pay Tasman Oil Tools deferred consideration
Industrial services and rental company Northbridge Industrial Services announced a placing of two million ordinary shares on Wednesday, to raise £2.5m gross at a price of 125p per placing share with existing institutional shareholders.
The AIM-traded firm confirmed the placing was not conditional on a general meeting.
It said approximately £1.05m of the proceeds from the placing would be used to pay the outstanding deferred consideration due to the vendor of Tasman Oil Tools and Tasman Oil Tools Leasing.
That payment was originally due on 7 January, but was deferred until 7 July, with the debt currently incurring an interest charge of 8% per annum, payable monthly.
The deferred consideration was secured on the company's property in New Zealand and, as a result of the repayment of the deferred consideration, the security on that property would be released.
The balance of the net proceeds would be used as working capital in order to prepare for potential further investment in oil field rental equipment, if Northbridge's oil and gas markets maintained their recovery.
"This placing of new equity, taken together with the issue of the convertible loan notes in April 2018, has been well supported by a number of our major shareholders," said Northbridge CEO Eric Hook.
"It ensures that we are in the best possible position to take advantage of a recovery in our markets and brings down our net gearing to below 20%."