The Convertible Loan Note will have a coupon of 10 per cent. per annum and a maturity date twelve months after Shareholders approve the Further Galaxy Subscription. The Company must repay the Convertible Loan Note (together with accrued interest) in full on the maturity date. The Convertible Loan Note may be converted at any time at the option of the noteholder into Ordinary Shares at a conversion price of £0.06 per Ordinary Share. Under the requirements of the Act, and given Creat Group's current shareholding in the Company, the approval of the Company's shareholders would be needed for the convertible Loan Subscriber to convert the Convertible Loan Note.
The terms of the Convertible Loan entitle the Convertible Loan Subscriber to assign it to a third party in whole or part if the assignee enters into an orderly marketing arrangement in a form similar to that described in paragraph 10.3.2 of part 5 of the Admission Document and (a) the Company has provided its prior written consent; or (b), inter alia, (i) the assignee is not a related party to the Company; (ii) upon conversion, that the assignee's relevant interests in the Company's Ordinary Shares will not exceed 19.99 per cent.; and (iii) notification of the assignment or subsequent conversion is not required by relevant legislation. Upon assignment, the assignee is obliged to immediately serve a notice on the Company requiring it to convert the Convertible Loan Note into Ordinary Shares.
Pursuant to the Placing Agreement, if the Second Round Placing is not fully subscribed, Creat Group may itself procure third party investors to subscribe for Ordinary Shares at the Placing Price and/or agree with third party investors that the Convertible Loan Note shall be assigned to them immediately following its issue prior to Re-Admission (with the effect that the Convertible Loan Note would be converted into Ordinary Shares as described above). Creat Group intends to explore opportunities to procure such third party investors between the date of the Admission Document and the date of the AGM. Should it be proposed that any potential investor identified by Creat Group in accordance with the above will hold 10 per cent. or more of the Company's issued share capital, the identity of such investor will be announced by no later than 7 clear days immediately prior to the AGM. In the event that no funds are raised pursuant to the Second Round Placing and no third party investors are procured by Creat Group then the Convertible Loan Subscriber may (if the Convertible Loan Note is converted) acquire all shares issued pursuant to the terms of the Convertible Loan Note, which would (provided that any necessary regulatory requirements have been complied with) increase Creat Group's shareholding (together with its subsidiaries) to approximately 70.61 per cent (assuming the Equity Put Options are not exercised
GXY Price at posting:
7.8¢ Sentiment: None Disclosure: Not Held
