NEXION Issues 900,000 Convertible Notes at 10% Interest, Total Now 17.5M
NEXION Group Ltd has issued 900,000 convertible notes to raise $90,000, increasing its total convertible notes to 17.5 million. The notes carry a 10% interest rate and may convert to shares subject to shareholder approval and transaction outcomes.
- Issued 900,000 unsecured convertible notes at $0.10 each
- Total convertible notes on issue now 17.5 million
- Notes mature 31 May 2026 with 10% annual interest
- Conversion to shares and options contingent on shareholder approval and transaction status
- Company expects full cash repayment, not conversion
Funding for Strategic Exploration
NEXION Group Ltd (ASX, NNG), a Perth-based hybrid-cloud technology provider, has announced the issuance of 900,000 convertible notes at a face value of $0.10 each, raising $90,000. This latest capital raise increases the total number of convertible notes on issue to 17.5 million. The funds are earmarked to cover costs associated with identifying and advancing a potential strategic transaction previously flagged by the company.
Convertible Notes Terms and Conditions
The notes carry a 10% per annum interest rate and mature on 31 May 2026. They are unsecured and may be repaid in cash at NEXION's discretion before maturity. Alternatively, noteholders have the option to convert their notes into fully paid ordinary shares and free-attaching options, collectively termed Conversion Securities. However, conversion is subject to several conditions, including shareholder approval, no objection from the ASX, and confirmation that the proposed acquisition announced in April 2024 will not proceed or has not occurred by maturity.
Conversion Unlikely, Cash Repayment Expected
At this stage, NEXION anticipates repaying the convertible notes in full with cash rather than issuing new shares or options. This stance suggests the company is keeping its capital structure flexible while it evaluates the outcome of the proposed transaction. The conversion terms offer noteholders 4.25 options for every share issued upon conversion, exercisable at a nominal price and expiring mid-2026, providing some upside if conversion occurs.
Strategic Implications for NEXION
NEXION operates a 2MW data centre in Perth and integrates cloud infrastructure and cybersecurity solutions. The issuance of convertible notes reflects a cautious approach to funding as the company navigates potential growth opportunities. Investors will be watching closely for updates on the proposed transaction and any shareholder votes that could unlock conversion rights. The company’s ability to manage its capital efficiently while pursuing strategic deals will be critical in the coming months.
Bottom Line?
NEXION’s convertible note issuance signals cautious funding ahead of a pivotal strategic decision.
Questions in the middle?
- Will the proposed acquisition proceed or be abandoned before note maturity?
- How will shareholder approval votes influence potential note conversion?
- What impact will the convertible notes have on NEXION’s capital structure if converted?