DX Group announces CEO appointment and £24m fundraising

DX Group announces CEO appointment and £24m fundraising

DX Group has announced that it has reached agreement for £24m fundraising, and Lloyd Dunn has been appointed as CEO with immediate effect. As previously reported, DX Group is currently  going through a process of re-funding and also re-structuring its board.

In a statement sent to Post&Parcel today (9 October), DX Group said: “The Fundraising is time critical to address the short term cash position of the Company which has become weak reflecting the previously announced challenges in the business that have impacted profitability and cash generation.”

The fundraising is to be in the form of secured loan notes in two tranches.

The first tranche of £16.3m is to be issued principally to Gatemore Capital Management (DX Group’s largest shareholder) and to the company’s new proposed directors. The proposed directors are Ron Series, Dunn, Russell Black and Paul Goodson  who will be, respectively, Chairman, CEO and Non-executive Directors on completion of Tranche 1.

The second trance of £7.7m is to be issued principally to Hargreave Hale, acting as investment manager for Marlborough Special Situations Fund.

DX Group commented: “The Board considers that a fundraising by way of Loan Notes with conditional conversion rights is the most appropriate route for the Company to raise the capital it needs in the timescale available.

“Refinancing of £2.0m unsecured term loan from Gatemore is included in the aggregate issue.”

Bob Holt, the Chairman of DX, commented: “I am delighted to announce details of DX’s refinancing and new leadership team.  As of today, Lloyd Dunn will be taking the helm as Chief Executive Officer and, on completion of the first tranche of the fundraising, he will join the Board along with Ron Series, who will join as Chairman, and Russell Black and Paul Goodson, who will join as Non-executive Directors.

“These changes together mark a new chapter for DX and provide firm foundations for the turnaround of the Group.  I would like to thank our shareholders, bankers, staff and customers, for their ongoing support during a difficult time for the Group, and I view the future for DX with renewed confidence.”

Dunn and Series made this joint statement: “We believe that this refinancing is a critical step in the exciting opportunity to turn DX around. Together with Russell Black and Paul Goodson, and alongside DX’s major institutional shareholders, Gatemore and Hargreave Hale, we are pleased to be directly participating in this fundraising, and we look forward to leading the wider DX team as we translate the opportunity that we see into sustainable revenue and profit growth for all stakeholders.”

In a statement sent to Post&Parcel this morning,  Liad Meidar, CIO and Managing Partner at Gatemore Capital Management, said: “Today marks a new start for DX.  We are thrilled to see Lloyd Dunn taking the reins as CEO and are looking forward to having the four nominees join the board very soon.  They have all shown tremendous commitment and confidence in the future of this business with their significant participation in this financing.

“DX now has a healthy balance sheet and is poised to return to historic levels of profitability over the coming years under this new team.  The enthusiasm amongst everyone who has been working on this is palpable.

 

 

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