Cash shell Orogen looking to buy Thread 35

Recently-formed AIM Rule 15 cash shell seeking a reverse takeover, Orogen, announced on Friday that it had agreed heads of terms with Thread 35 to acquire Thread's entire issued share capital, subject to certain conditions and due diligence.

The company said the acquisition would constitute a reverse transaction under the AIM Rules.

It said Thread operated an e-commerce womenswear brand targeting 35-55-year-old women under the brand name ‘Sosandar’.

As part of the proposed transaction, Orogen said it made a secured loan of up to £0.25m to Thread, with the loan being interest free and able to be drawn down in two tranches.

The first tranche of £0.1m may be drawn down immediately, whilst the second tranche may only be drawn down on the condition that letters of intent are obtained by the company from Thread's shareholders to accept the terms of an offer to acquire their shares, Orogen said.

As a result of the heads of terms, the company confirmed it requested that trading in its shares is temporarily suspended, pending either the publication of an admission document or until the proposed acquisition negotiations are terminated.

“I am delighted that Orogen has found an attractive acquisition opportunity so quickly,” said chairman Adam Reynolds.

“Sosandar is operating in a market that is showing significant growth and it has a highly motivated and experienced management team.

“With added balance sheet strength I believe we will be able to accelerate this growth opportunity, benefiting all shareholders in the enlarged group.”