In the current capital market environment that is risk-averse and has limited small-caps’ access to crucial investment, Aferian PLC (AIM: AFRN) has executed an impressive move.
The company, which operates in the video streaming sector, has successfully raised $4m (approximately £3.1m in local currency) in new funding. Remarkably, this was accomplished by issuing new shares at a rate approximately 20% higher than their market price on Monday.
This somewhat unexpected development led to a 39% surge in the stock to 13.9p, bringing the business valuation to £11.85M.
The funds raised from the share placing will be utilized for general working capital, reducing the need to use debt for its recovery.
In a statement made to investors on Monday, CEO Donald McGarva said, “Our objective with this proposed placing is to guarantee we have access to appropriate, diverse sources of working capital to propel our ambition.”
He added, “Upon successful completion of the proposed placing, we will not only maintain the sufficient headroom already secured over our banking covenants but will also have capital solely dedicated to initiatives that advance our edge in the rapidly growing video streaming market, as streaming becomes increasingly the most preferred way to watch videos.”
