Centurion back on the march?
Hertfordshire in-car DVD player maker, Centurion Electronics topped the list of biggest one-day gains in inauspicious circumstances, having previously had 95 per cent wiped off its shares.Hertfordshire in-car DVD player maker, Centurion Electronics topped the list of biggest one-day gains in inauspicious circumstances, having previously had 95 per cent wiped off its shares.
The company’s shares tumbled 18.5p to 1p on the first day after readmisssion to trading, following a suspension to renegotiate its £3.6m debt with lender, HSBC.
The shares staged a recovery of sorts on the second day of trading, going up by 112.5 per cent to 2.13p. The rescue package it negotiated has come at a high price to existing shareholders, with a proposed placing having by Centurion’s own admission, an “extremely dilutive effect.”
The beleagured company plans to place 510 million new shares at 0.5 pence per share to raise £2.55m. The placing, which has not been underwritten, represents 95.4 per cent of the enlarged share capital.
Centurion is also issuing £1m in convertible loan notes, subscribed for by Ravens-worth, another creditor. Debt will be restructured through a £2m repayment, the cancellation of £1.1m in debt and the conversion of £600k in debt into new shares.
An announcement from the company stated: “The restructuring is necessary to secure the company’s future. The directors realise that it will be extremely dilutive to shareholders, but it is the board’s opinion that these measures represent the most appropriate and viable option to secure the company’s future while preserving some value for shareholders.”
The company is playing up its prospects having cleared its decks in a number of different ways. It has discontinued its retail operations and dispensed with the services of former chairman, appointing Ernst Kastner, a specialist consultant retained by Ravensworth.
It also reiterated its assertion that it has a big contract win in the pipeline, although the name of the customer remains a mystery.
The company said: “It is anticipated that the company is well positioned to return to profitability, although the directors anticipate that the company is not likely to report a profit for the first half of the current financial year to March 31.”