Allergy Therapeutics (LON: AGY) is raising £40.75m from Skygem and Southern Fox, plus an open offer to shareholders underwritten by Skygem. The issue price is 1p. This could require a mandatory bid for the allergy treatments developer from Skygem if its stake goes above 30%. However, the AIM quotation will be maintained.
In September 2022, the two investors subscribed £7m at 20p a share. The mandatory bid would be at 1p, though. Southern Fox, which could end up with 27.5% of Allergy Therapeutics, would not accept any bid. A loan facility of £40.75m has been set up until the authorities approve the new investment.
Skygem is an indirect subsidiary of funds managed by Asian private equity firm ZQ Capital Management and it was set up to buy shares in Allergy Therapeutics in 2019. Skygem currently owns 25.6% and it believes it can help in Asian markets.
Production problems mean that 2022-23 revenues will be below expectations. The manufacturing facilities require investment, and it will be difficult to gain significant funding from elsewhere.
AIM-quoted Allergy Therapeutics shares are suspended at 6.25p. The cash will enable the accounts for the year to June 2022 and the subsequent interims to be published. NatWest will not allow the use of the revolving debt facility because of the loss being made.
Interim revenues fell from £48.7m to £39.9m and higher R&D spending has moved the company into loss.