MicroSalt said its majority shareholder has agreed to convert $2.4m of debt into shares in a development the low-sodium company said would strengthen its balance sheet.
The firm said it was also weighing a small equity raise of $1m and entered the newly introduced ‘Capital Access Window’. MicroSalt shares were suspended as part of the Capital Access Window.
MicroSalt said Tekcapital had elected to convert $2.4m of the roughly $2.9m outstanding into new shares, removing a repayment liability that had largely been due in March 2027.
The conversion, priced at 16p a share, a 10% premium to the previous day’s closing price, will lift Tekcapital’s stake to about 65% of the enlarged company. But this is likely to be diluted by the placing and retail offer.
MicroSalt provided no indication of the price of the placing.
To support the process, MicroSalt has entered a “Capital Access Window” — a voluntary pause in the trading of its shares, newly permitted under AIM rules. Its shares will remain suspended until a further announcement.
The conversion of shares is a double-edged sword for MicroSalt shareholders: they will face new shares being issued near record lows, but will also benefit from the debt being removed from the balance sheet.
The future success of MicroSalt, and in part, Tekcapital, depends on whether MicroSalt can deliver on its recently reaffirmed sales projection of $15 million next year. The margins will be key here.
The smaller size of the placing compared to prior raises suggests they are relatively confident they will achieve the sales target.