Pace founder Hood takes 83% stake in Infoserve
INTERNET search marketing business Infoserve Group today agreed a debt for equity swap with its major shareholder David Hood which will see the Pace founder increase his stake in the company from 47% to 83%.
Mr Hood has also agreed to provide an £800,000 loan to the loss-making business at a 10% annual interest rate.
Infoserve announced today that it will lose its status as an authorised Google AdWords reseller but said that the move is “not expected” to affect its daily operations and revenues “materially”.
Infoserve, headed by Mr Hood’s former Pace colleague Steve Barnes, said the deal with its major shareholder would enable it to “to continue to fund its ongoing and improving trading activities and to pursue other growth opportunities available to it”.
The move will see it issue 40m new shares at 5p each to the value of £2m to Mr Hood whose loans to the company will be reduced from £3.53m to £1.45m and whose stake will increase from 46.86% to 82.84%.
Infoserve said it was seeking a waiver from the Takeover Panel so that Mr Hood does not have to make an offer for the entire share capital of the company, despite his larger stake.
The loan from Mr Hood includes £550,000 for immediate drawdown and another £250,000 to be made available if its overdraft facility is withdrawn.
He has agreed to the deferment of payments of £300,000 and the writing off of trading liabilities of £50,000.
