Distribution Finance Capital Holdings (LON: DFCH) share price is falling on Friday after the company announced it has conditionally placed with certain new and existing institutional investors and entered into a direct subscription agreement concerning 72.72 million new ordinary shares of one penny each in the capital of the company at a price of 55p per placing share to raise £40 million.
The placing shares represent approximately 68.2% of ordinary shares in issue and date of companies announcement.
DFCH said the net proceeds, which are expected to be £40 million before expenses, will primarily be used to accelerate its business plan and loan book growth by unlocking a significant and current pipeline of demand.
It will also allow the group to provide larger facilities to select customers where the group is currently restricted due to regulatory large exposure limits. They will also have the ability to remove the current £270 million constraint on the loan book and should support a loan book of up to £550 million.
DFCH believe the acceleration of its global growth coupled with the loan book being entirely funded by retail deposits should speed up the achievement of run-rate profitability into the fourth quarter of 2021.
Investec is acting as a nominated adviser, sole bookrunner, and sole broker to DFCH regarding the placing.
“2020 was a strong year of delivery for the Group. Having received our banking licence and successfully launched our retail savings products, we now have sustainable low-cost funding in place that supports our growth plans,” commented Carl D’Ammassa, CEO of DFCH.
The company’s shares fell over 10% after the open on Friday, they're currently trading at 64p down 9.87%.