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Investors to rescue First Capital

Investors to rescue First Capital

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— 1 minute read
Investors throw beleaguered First Capital Group a $3 million lifeline.
A group of investors will attempt to revive struggling financial services business First Capital Group, with a funds injection of $3 million.

According to a statement released to the Australian Securities Exchange, First Capital received an offer from a group of investors to recapitalise the company.

"We are unable to comment on the identity or nature of the investors involved as the recapitalisation is still subject to shareholder approval," a company spokesperson said.

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"There are no immediate plans to use the $3 million for acquisitions, but we will further notify the market as changes in the business occur."

The offer is a $3 million raising by way of redeemable convertible secured notes.

"The approach by this investor group reflects confidence in the continued restructure of the group and in the future value and growth in First Capital's underlying funds management business," acting managing director Tom Wallace said.

A terms sheet has been executed providing that for each $1 raised under the proposed note agreement, the convertible note holders will receive 25 shares per note together with 12.5 free options exercisable at 0.08 cents per option with a term of three years.

A coupon rate of 10 per cent per annum will apply. The note agreement is subject to a proposed shareholders meeting.

Earlier this month, First Capital recorded a net loss of nearly $13 million for the 2006/07 year.

 

Investors to rescue First Capital
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