Scout Gaming Group raises SEK101m in share issue
The fantasy sports provider has diluted existing shares by 90 per cent.
Sweden.- The fantasy sports provider Scout Gaming Group has reported the results of its share issue designed to save the business. It raised SEK101m (€9.3m) through a process that diluted existing shares in the company by 90 per cent. Shareholders were each offered the chance to purchase nine additional shares at SEK0.50 per share.
The share issue was an attempt to save the company after it discovered a SEK17m commitment that it had been unaware of and which would impact cash flows in the current quarter. Shareholders approved the issue on September 1.
SEK2.5m will cover the cost of the issue itself, while around 40 per cent of the remainder will pay off short-term bridge financing. The rest – around SEK59.1m – will shore up the company’s cash balance.
Scout was to issue 202.7 million new shares but the shares were oversubscribed at 245.1 million, removing the need for underwriting proceedings with major shareholders Topline Capital Partners LP, Scobie Ward, Novobis AB, Knutsson Holdings AB and Erlinghundra AB. Shareholders may not sell the new shares without Scout’s permission for nine months.
Scout has also begun restructuring its staff, laying off around half of its workers. It will lay off 68 employees, including in Lviv, Ukraine, leaving just 63 staff.
In June, Andreas Ternström stepped down as CEO and president of Scout Gaming Group after six years in the role. Chief financial officer Niklas Jönsson has stepped in as acting CEO until a permanent replacement is found. In March, Ternström announced a cost review due to slow growth and increased expenses.
