Nektan PLC (AIM: NKTN) is proposing a capital restructuring to strengthen its balance sheet as the online gaming technology provider's business-to-business arm begins integrating new clients at a rapid rate across Asia and Africa.
In Europe, two B2B client sites are expected to integrate in September and October and four in December, with India expected to see seven in the coming three months and Taiwan four in October and November. Many of these are well established brands in their respective geographies.
If successful, Nektan believes revenues from these integrations "have the potential to transform the group's financial results".
The company wants to raise £3mln from a new share issue and has made arrangements to convert some of its convertible loan notes (CLNs) and to extend repayments of other CLNs and with two directors that have provided loans.
Chairman Jim Wilkinson said: “The proposed placing and associated strengthening of the group's balance sheet through the conversion and extension of its convertible loan notes is a very important development for Nektan and, if successful, will leave us in a materially stronger position. I thank the CLN holders for their support in this regard.”
The £3mln placing will provide cash for working capital purposes and some £3.9mln of CLNs will be converted at the placing price, which has not yet been confirmed.
Wilkinson added: “With a significant number of integrations expected to be delivered during the course of 2019 and a pipeline of exciting opportunities, the group believes it has reached a transformational stage and has an exciting future ahead.”
An operational shift earlier in the year saw Nektan restructure the company towards a greater focus on B2B, in response to the changing gaming environment and to allow for greater growth in international markets.