Malvern (AIM: MLVN), the global learning and skills development partner, today announces that the Company is carrying out an equity fundraising to raise gross proceeds of approximately £1.17 million by way of a placing to raise up to £0.79 million and a subscription to raise approximately £0.38 million in each case at a price of 0.15 pence per share.

The Issue Price represents a discount of approximately 61 per cent. to the closing mid-market price of 0.38 pence per Existing Ordinary Share on 19 May 2020, being the latest practicable date prior to the publication of this Announcement.

WH Ireland Limited (“WH Ireland”) is acting as sole bookrunner in connection with the Placing. The Placing Shares are being offered by way of an accelerated bookbuild (the “Bookbuild”), which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix 1 to this Announcement.

The timing of the closing of the Bookbuild and the allocation of Placing Shares to be issued at the Issue Price are to be determined at the discretion of the Company and WH Ireland.

A further announcement will be made following the close of the Bookbuild, confirming final details of the Fundraising.

The Company intends to publish and send a circular (the “Circular”) to shareholders in connection with the Fundraising on or around 20 May 2020. The Circular will also be available on the Company’s website in due course: www.malverninternational.com.

Fundraising Highlights

• Fundraising by way of a Placing and a Subscription to raise approximately £1.17 million through the issue of an aggregate of approximately 780,000,000 New Ordinary Shares at the Issue Price.
• Placing to raise up to approximately £0.79 million through the issue of approximately 526,666,667 New Ordinary Shares at the Issue Price.
• Subscription to raise up to approximately £0.38 million through the issue of 253,333,333 New Ordinary Shares at the Issue Price.
• The Issue Price represents a discount of approximately 61 per cent. to the closing mid-market price of 0.38 pence per Existing Ordinary Share on 19 May 2020, being the latest practicable date prior to the publication of this Announcement.
• The net proceeds of the Fundraising will be used to provide the Company with additional working capital and strengthen the Company’s balance sheet.
• The Fundraising Shares, assuming full take-up, will represent approximately 67 per cent. of the Company’s Enlarged Issued Share Capital.
• The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the discretion of WH Ireland, in consultation with the Company. The Placing is not underwritten.
• The final number of Placing Shares will be agreed by WH Ireland and the Company at the close of the Bookbuild, and the result will be announced as soon as practicable thereafter.
• Appendix 1 to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.
• Appendix 2 to this Announcement (which forms part of this Announcement) contains the definitions contained in this Announcement.
• The Company expects to publish a Circular in connection with the Fundraising following the closure of the Accelerated Book Build, in order to convene the General Meeting.

Transaction Highlights

• Subject to contract, the Company has agreed a restructuring of its existing debt with Boost & Co. which provides for  a two year capital repayment holiday and interest free period subject to performance conditions.
• The Directors believe that the funds raised from the Fundraising will provide sufficient working capital to support Malvern’s planned operations until the Company reaches cash flow break even.
• The vast majority of employees (including all directors) have taken a pay cut, whether on furlough or not.
• The Company believes trading will be interrupted for some time and is working on the assumption that it will not be until early 2021 that the level of business returns to normal levels.
• Subject to Fundraising being approved at the General Meeting and approval from the nominated adviser, Amit Kumar Jhunjhunwala will be appointed as a director of the Company and act as Interim Chief Financial Officer, until a permanent appointment is made.
• Subject to the Resolutions being approved at the General Meeting and Admission, Haider Sithawalla, a non-executive director of the Company, has agreed to step down as a director of the Company.
• The Company’s results for the year ended 31 December 2019 are expected to be completed following completion of the Fundraising and announced in the week commencing 22 June 2020.
• The Company expects to report  revenues for the year of £6.9 million and negative unadjusted earnings before interest tax depreciation and amortisation (“EBITDA”) including one-off costs, Brighton school establishment cost, restructuring costs and operations. Reported losses are expected to be in excess of £6 million reflecting, inter alia, discontinued activities in Malaysia and significant impairments and write offs to goodwill and intangible assets. At the schools themselves, the UK schools (excluding the new Brighton school) in aggregate traded profitably at an operating level and the Singapore school recorded a loss.
• A General Meeting to approve the resolutions required to implement the Fundraising is expected to be held on 8 June 2020 at 11.00 a.m. at the offices of Malvern at 200 Pentonville Rd, London N1 9JP with the minimum necessary quorum of two shareholders (which will be facilitated by Malvern). A detailed timetable of events is set out in this announcement.
• Due to the ongoing Covid-19 pandemic, it will not be possible for Shareholders to attend the General Meeting in person. Shareholders are strongly urged to vote by proxy in advance of the deadline by completing their form of proxy in accordance with the instructions and further details are set out in the Circular and the form of proxy.