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Bidstack Group PLC shares plummeted on Monday, with the firm saying that it ‘must’ consider funding alternatives as it remains unable to complete its loan agreement with Irdeto BV.
Shares in Bidstack were trading 57% lower at 0.23 pence each on Monday morning in London.
Bidstack, a London-based in-game advertising company, said its working capital position remains tight despite its recent settlement with commercial partner Azerion.
In late December Bidstack announced the settlement, with Azerion paying €3 million.
However, Bidstack said that at January 31 its cash balance was approximately £1.4 million, although it ‘has continued to manage its cash resources very carefully’.
Bidstack added that ‘without further external funding, and assuming the company cannot utilise any more funds from the [convertible loan note agreement], the group only has sufficient cash resources until the end of March 2024.’
Bidstack agreed to enter that convertible loan note deal with strategic investor Irdeto in mid-October.
To enable Irdeto to utilise the CLN, the partners require the approval of a waiver of Rule 9 of the City Code on Takeovers & Mergers.
To obtain the approval, Bidstack must submit a draft shareholder circular to the relevant panel. In order to provide the requisite information, Irdeto is seeking to obtain certain disclosures from its parent company, Johannesburg-based video entertainment firm Multichoice Group Ltd.
However, as of Monday Irdeto has not obtained the necessary disclosures and documentation from Multichoice. Consequently, Bidstack has so far been unable to submit the draft circular to the Panel on Takeovers & Mergers for review.
Bidstack said it has, to date, drawn down one tranche of around £600,000 from the CLN, and does not currently expect to make further drawdowns thanks to the above delays, hence its ‘tight’ working capital position.
Bidstack maintained that it is ‘keen to continue to work with Irdeto’. However, it also ‘feels that it must also consider other funding alternatives’, and therefore announced its decision to launch a strategic review.
Bidstack said it has appointed restructuring adviser Alvarez & Marsal Europe LLP which, alongside Bidstack and its other advisers, ‘will look at all options for the future of the group’. This ‘may or may not involve’ selling the company’s assets.
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