LoopUp to de-list from AIM as it seeks to raise funds privately

LoopUp said on Monday that it was planning to leave the London stock market and raise funds privately.

The AIM-listed telecoms company said it was looking to raise funds and that following an extensive review, it has concluded that taking the business private would it give it more flexibility to invest in future growth.

Co-chief executives Steve Flavell and Michael Hughes said: "The priority for us now is to ensure we have the right funding to continue this growth and deliver on our potential. We have exhaustively explored all options to arrive at today's announcement, with the board unanimously concluding that this proposal to de-list and conduct a private fundraising is in the best interests of the group and of our shareholders as a whole.

"At this stage in our growth journey, taking the business private will provide us with the flexibility to invest in our future growth, underpinned by a significant near-term cash injection that certain private investors stand ready to make and a medium-term pathway to venture and private equity sponsorship."

The company said it was planning to raise around £9m "to capitalise on the opportunity for LoopUp's Multinational Cloud Telephony business" and to service its outstanding debt of about £6m with Bank of Ireland.

LoopUp said it does not believe that an equity fundraising for the £9m short-term cash requirement would be possible through public markets, "particularly in view of the group's current market capitalisation".

Based on the outcome of its most recent fundraising in September 2022 and current indications from the major contributors to that fundraising, LoopUp reckoned it would only be able to raise the necessary £9m investment as a private company.

It has already received indications of intentions to invest £6.2m from four private investors, provided that such investment is made into a private company, that at least £9m is raised in total and that existing debt with Bank of Ireland is refinanced before its maturity on 30 September 2024.

News of the de-listing came alongside an update in which LoopUp said that trading was in line with expectations.

FY23 revenue is expected to be around £21.2m, up 34% over like-for-like revenue in FY22.

At 0940 GMT, the shares were down 69% at 0.64p.