Datalex, the retail software provider for airlines, on Friday launched a € 25million capital raise as it seeks to raise funds to repay costly loans from its largest shareholder, the man Dermot Desmond business, and ensure that he has sufficient working capital.
Mr. Desmond’s IIU investment vehicle, which owns 29.8% of Datalex, is participating in the capital increase as it will see its stake exceed the level of 30% that would normally require the billionaire to make an offer full on the stock market. rules. However, the Irish Takeover Panel granted Mr. Desmond a waiver, subject to approval by other shareholders at an extraordinary general meeting.
The planned fundraising has three stages. First, IIU and another shareholder, Pageant Holdings and its founder, Nick Furlong, have committed to buy 14.7 million euros of new shares in a so-called cornerstone placement. Meanwhile, Datalex’s corporate broker, Goodbody Stockbrokers, is launching a € 4.2 million stock offering to stock investors on Friday.
The third element will include a planned “open offer” share sale of € 6.1 million to existing investors. The pillar investors will also participate in order to maintain their respective holdings.
Mr Desmond’s Tireragh vehicle provided Datalex with € 11.3 million in emergency loans in 2019 as the company faced the fallout from an accounting scandal. It accepted an additional € 10 million debt facility last year, but Datalex did not need to withdraw it. The existing loans, which bear an interest rate of 10%, mature in September 2022.
Datalex said it plans to use the net proceeds of 23.7 million euros from the capital increase to repay the Tireragh loans, which, together with accrued interest, now stand at around 16 million euros. euros.
The balance of funds will be used for “working capital financing to support the implementation of new income opportunities and an acceleration of the company’s investment in its product roadmap,” he said. declared.
Datalex’s revenue fell 38% to $ 28.1 million (€ 23.2 million) last year, when the company’s airline customers suffered their worst year on record as Covid- 19 has practically stopped international travel. Airlines use Datalex software to manage airline ticket sales and prices, pay clock and baggage fees, and make car, hotel and insurance reservations.
However, the company said when announcing its 2020 results in April that it sees a growing pipeline of potential work as airlines begin to plan for a post-Covid world.
“Today marks an important step for the group. We are preparing for the next step towards growth, and it is important that the group has the right capital structure in place for this phase, ”said Managing Director Sean Corkery. “While 2021 remains a difficult time for the airline industry, in recent months we have seen an increase in potential opportunities. By strengthening our balance sheet and raising additional working capital, the group is in a much better position to take advantage of these opportunities. “
Datalex plans to move its shares from the main Euronext Dublin market to the junior Euronext Growth market, which will reduce administrative and regulatory requirements and also allow the company to avoid having to produce a prospectus to complete the capital increase.