NEWS17 August 2010
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NEWS17 August 2010
AUSTRALIA— Marketing and communications agency Photon Group is looking to raise A$102.5m through a new stock offering to solve its recent money troubles.
The group, which owns research agencies The Leading Edge and Jigsaw, is offering stock at $0.10 a share and will use the cash, as well as a refinancing of its debt facilities, to recapitalise.
Money generated by the share offer will be used to pay off some of the group’s existing bank debt and cover $22.5m worth of deferred consideration payments.
Photon, headed by CEO Jeremy Philips (pictured), ran into trouble earlier this year when it was unable to meet A$176m worth of earn out commitments to the owners of agencies it had acquired.
Trading in the group’s shares were suspended while it set about recapitalising and renegotiating its payout liabilities. According to a statement earlier this month, almost all of the founders of Photon’s acquired agencies have agreed to reduced cash settlements and shares in the group.
Photon shareholders will be given the chance to approve the share issue at a meeting in Sydney in September. Founder Tim Hughes quit the group last week.
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