Good morning, it's Paul here with the SCVR for Friday.

Estimated timings - I have to stop for a zoom meeting at 1pm.
Today's report is now finished.

Revolution Bars (LON:RBG)

(at the time of writing, I hold a long position in this share)

Fundraising & move to AIM

Key points (written before 8am market opening);

  • Raising c.£15m (before fees)
  • Price of 20p per share, a deep discount of 42%
  • Firm placing: 45.0m new shares
  • Open offer & placing: 30.0m shares - this is the most important part for existing investors to understand. Existing shareholders are entitled to apply for 3 open offer shares, for every existing 5 shares held. The open offer makes up 40% of the total fundraising - one of the largest I've seen. This is really good news (in a bad situation), as it means that we existing holders can stand our corner and apply for cheap shares ourselves, thus not being diluted as much as if it was just a placing.
  • The key thing is that the share price should, theoretically, settle somewhere between yesterday's close of about 33p, and the fundraising price of 20p. This should mean that investors have a loss on our existing shares, but a profit on our new shares. The two have to be seen together. Whether the market will see it that way, remains to be seen, when the market opens. Remember if you sell before 7am on 9 June, then you lose your entitlement to the 20p open offer shares - that's the ex-entitlement date. [Edit: NB check everything with your broker, I'm not 100% sure about this specific point, my apologies]
  • Moving from main market to AIM, mainly because that enables cheaper fundraisings. Otherwise, it would have had to go to the considerable time & expense of preparing a prospectus for this fundraising. I like this move, as it will enable IHT portfolio buyers to get involved. AIM is a more appropriate market for a micro cap.
  • Main use of funds - to reduce gearing, which I'm sure everyone agrees was going to be too high.
  • Bank facilities will reduce by half the fundraising amount, at £7.5m, but not until March 2021 - so it should now have tons of liquidity headroom for the foreseeable future.
  • Board investing £132k - a worthwhile amount - I get the impression they are ordinary people, not wealthy people, so this is…

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