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Advanced Oncotherapy shares jump as it says “number of financing options" remain under consideration

Published: 10:01 10 Mar 2017 EST

Protons
AVO said it “believes the Facility is in the best interests of the Shareholders taken as a whole.”

Advanced Oncotherapy (LON:AVO) saw its shares jump over 7% higher today after the proton therapy cancer treatment systems developer confirmed that “a number of financing options remain under consideration” as it urged shareholders to back a proposed equity financing facility with Dubai-based Bracknor Investment Group.

On February 22, AVO announced that it had secured financing of up to £52mln to help fund the development of its LIGHT proton therapy system, as well as paying for the installation of the first LIGHT unit at its new Harley Street facility.

The agreement with Bracknor will see AVO issue a minimum of £13mln in convertible loan notes in tranches of £1.3mln each over the next 24 months.

READ: Advanced Oncotherapy secures financing …

It said Bracknor is prevented from acquiring more than 29.9% of the company’s shares. AVO announced on February 24 that it had drawn down the first tranche of money under the new facitlity, and a few days later revealed that Bracknor was to convert 10 loan notes, worth £100,000, into AVO shares at 57p each.

In a circular to shareholders released today, ahead of a general meeting to vote on the deal scheduled for March 31, AVO pointed out it is “aware of shareholder concerns relating to funding and dilution.”

But the group said it “believes the Facility is in the best interests of the Shareholders taken as a whole.”

AVO pointed out that its board and management own in excess of 20% of the company's issued share capital and “consider their interests to be aligned with those of other shareholders.

Financial positioning …

The group also said it “remains committed to ensure a secure financial position that can facilitate the commercialisation of the LIGHT system and crystallise the significant shareholder value associated with the provision of affordable proton therapy.”

It added that these “include, but are not limited to, non-dilutive financing, the facility with Metric Capital, in relation to which constructive discussions continue, and asset-based lending."

“The Company is in receipt of several term sheets for asset-based funding and, at this date, has not drawn down any funds under the Metric Capital facility”.

In its statement at the end of February, AVO said its other financing option with Metric Capital, which it provisionally agreed last September, remains open to consideration.

In today’s circular, John Sinik, managing partner and chairman of the Investment Committee at Metric Capital said: "We do not see the investment by Bracknor as a deterrent to the investment by Metric Capital and continue working constructively with the company on finalising the investment in AVO."

In reaction to the reassuring statement, AVO shares were up 7.7%, or 3p at 420p in late afternoon trading.

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