Bridge Financing
August 31 2010 - 2:45AM
UK Regulatory
TIDMFCOM
RNS Number : 8447R
First Communications, Inc.
31 August 2010
First Communications, Inc.
Successful Bridge Financing Completed
Akron, OH, August 31, 2010 - First Communications, Inc. (AIM: FCOM) (the
"Company") today provides the following update on its successful equity raise
(the "Equity Raise") to satisfy terms of its recent bank amendment (Amendment
No.3) details of which were set out in the Company's final results announcement
dated May 6, 2010.
Equity Raise
On August 31, 2010, the Company announced the fulfillment of an obligation in
its existing credit facility (the "Facility") to raise at least an additional $4
million in equity and/or a cash capital contribution by August 31, 2010.
Two of its current shareholders, FirstEnergy Corp. and The Gores Group,
have provided $2 million each through their acquisition of Series B preferred
shares that the Board of Directors of the Company has the authority to issue and
price pursuant to the Company's Certificate of Incorporation and Delaware law.
The Series B Preferred have a PIK dividend rate of 15% with no cash dividend
payments being required. The terms of the Series B Preferred also include the
ability for the Company to redeem the shares anytime without penalty. The Series
B Preferred Shares are convertible into the Company's common shares at a
conversion price of $0.15 being the closing offer price of the Company's common
stock on the AIM on August 27, 2010, ("Conversion Price") per common share.
The Gores Group has been granted the right to convert its $12 million of
currently held Series A Preferred Shares into common shares at the Conversion
Price and FirstEnergy has been granted the right to convert its existing
subordinated debt of $6 million at this same per share price. These conversions
rights, however, cannot be exercised until May 31, 2011 and the Company intends
and expects that it will secure additional funding, part of which it will use to
redeem the Series B Preferred Shares before they can be converted. Shareholders
would suffer extensive dilution should the Company not secure funding to pay
down these convertible securities.
The Company's current trading is in line with the statements made in its interim
results ended June 30, 2010 and continues to meet management's expectations.
As FirstEnergy Corp. and The Gores Group are significant shareholders in the
Company, the above transactions will fall to be classified as related party
transactions. The Independent Directors, excluding those nominated to the Board
which represent these shareholders, believe that the terms of the Equity Raise
are fair and reasonable, insofar as shareholders are concerned, and given the
situation in which the Company finds itself in. In reaching its conclusion, the
Independent Directors have also consulted with the Company's major shareholders.
For Further Information:
+-------------------------------------+-------------------------------------+
| First Communications, Inc. | |
+-------------------------------------+-------------------------------------+
| Joe Morris | Tel: +1 (330) 835-2472 |
+-------------------------------------+-------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCSDUSMFFSSEDA
First Comms. (LSE:FCOM)
Historical Stock Chart
From Sep 2024 to Oct 2024
First Comms. (LSE:FCOM)
Historical Stock Chart
From Oct 2023 to Oct 2024