eServGlobal Limited HomeSend Capital Raise and Update (7181Z)
December 19 2017 - 1:00AM
UK Regulatory
TIDMESG
RNS Number : 7181Z
eServGlobal Limited
19 December 2017
eServGlobal Limited (eServGlobal or the "Company")
HomeSend Capital Raise and Update
19 December 2017
eServGlobal (LSE: ESG.L & ASX: ESV.AX), a pioneering digital
transactions technology company, announces that the shareholders of
HomeSend, its joint venture with Mastercard and BICS, has approved
a proposal to carry out a EUR10 million capital raise.
Proceeds are expected to be used by HomeSend for working capital
and to accelerate the building of additional functionality to meet
HomeSend's medium and long-term aims. The Board of eServGlobal
believes that the proceeds will allow HomeSend to better focus on
the far larger than expected growth opportunities in the
cross-border banking market.
eServGlobal will be offered the opportunity to participate in
the capital raise to maintain its 35% holding in HomeSend. The
Board of eServGlobal intends to fund its participation from
existing cash resources. The share issue is expected to complete by
the end of this year. BICS has decided that it will not be
participating in the capital raise and eServGlobal will therefore
be offered the opportunity to acquire its proportionate share of
BICS' entitlement which it intends to do. As a result, eServGlobal
will be investing EUR3.89 million into HomeSend, giving eServGlobal
a holding of 35.69% in HomeSend (Mastercard: 56.09%; BICS:
8.21%).
The capital raise is being carried out at a subscription price
that implies a valuation of the issued share capital of HomeSend
(before the capital raise) of EUR46 million ("Implied Valuation").
As the largest shareholder, Mastercard has proposed the Implied
Valuation however, this Implied Valuation does not represent the
HomeSend Board's view of the fair market value of HomeSend. As a
wholly internally funded investment round, the valuation is
irrelevant and has no bearing on the potential value of
HomeSend.
Momentum continues to gain pace, with 15 banks now having signed
agreements which enable them to use the HomeSend service for
cross-border transactions - an increase of five banks since our
statement on 2 October 2017. These several most recent agreements
are within the smaller part of the addressable market, and are
therefore for volumes expected to be in the range of US$30 - 50
million per annum each, with implementation plans still to be
finalised. HomeSend has also progressed discussions on contracts
for much larger opportunities, as mentioned in the announcement on
2 October 2017, and these opportunities remain imminent.
HomeSend is integrated within the "Mastercard Send for Cross
Border" platform, which is being positioned by Mastercard as a key
part of Mastercard's overall strategy.
eServGlobal Executive Chairman John Conoley said, "The Board of
eServGlobal is delighted with Mastercard's continued investment
into HomeSend and eServGlobal is happy to participate. The
valuation at which this raise is being conducted is a Mastercard
technical matter and is irrelevant compared to our internal
assessment of the value of our shareholding in HomeSend.
Furthermore, BICS' decision not to participate in the capital raise
gives eServGlobal the opportunity to increase its shareholding in
HomeSend (by taking up our proportion of BICS' entitlement) at a
price that we believe significantly undervalues HomeSend. The
continued commitment and investment by Mastercard is great news as
it will better position HomeSend to capture its tremendous
opportunity."
The Company will be holding an investor call at 9.30am UK on
Tuesday, 19 December 2017. Those investors wishing to dial in
should contact Alma, at eServGlobal@almapr.co.uk or on +44 (0)7580
216203
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
About eServGlobal
eServGlobal (AIM:ESG, ASX:ESV) is a pioneering digital financial
transactions technology company, enabling financial and
telecommunications service providers to create smoother
transactions for their customers through deep technical expertise
and rapid implementation. Built on the latest technology platforms,
eServGlobal offers a range of transaction services including
digital wallets, commerce, remittance, recharge, rapid service
connection and business analytics. eServGlobal combines more than
30 years' experience, with an agile, future-focused mindset, to
align with the requirements of customers and partners around the
globe.
Together with Mastercard and BICS, eServGlobal is a joint
venture partner of the HomeSend global payment hub, enabling
cross-border transfer between bank accounts, cards, mobile wallets,
or cash outlets from anywhere in the world.
For further information, please contact:
eServGlobal www.eservglobal.com
Tom Rowe, Company Secretary investors@eservglobal.com
Andrew Hayward, Chief Financial
Officer
Alison Cheek, VP Corporate Communications
finnCap Limited (Nomad and Broker) www.finnCap.com
Corporate Finance; Jonny Franklin-Adams T: +44 (0) 20 7220
/ Anthony Adams / Hannah Boros 0500
Corporate Broking; Tim Redfern/Richard
Chambers
Alma PR (Financial Public Relations) www.almapr.co.uk
Hilary Buchanan / John Coles / T: +44 (0) 208 004
Helena Bogle 4218
This information is provided by RNS
The company news service from the London Stock Exchange
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