Redstone ditches boss, secures new funding


Redstone ditches boss, secures new funding

Alex Scroxton

IT and comms integrator Redstone may have pulled back from the brink after securing a fundraising round of £8.5m, restructuring its debt obligations with an extended banking facility, and dispensing with the services of executive chairman Stephen Yapp.

Yapp is to be replaced with investors and serial entrepreneurs Ian Smith and Tony Weaver, who hold non-exec directorships with the troubled firm

The two recently extricated themselves from Avisen following a boardroom clash and have made plans to build a managed security services specialist, with Redstone expected to form the basis of the roll-up.

Smith and Weaver have also today ploughed £1m into Redstone through investment vehicle MXC Capital.

In a statement to the markets this morning, Redstone said it was aware that the dilutive nature of the move was not attractive to shareholders, but said that without it, the "level of gearing in the Company would, in the Directors' opinion, be unsustainable".

"If the Resolutions are not passed, the Company would be unlikely to be able to continue to trade and in such circumstances, it is unlikely that the Ordinary Shares would have any value," Redstone said.

"We have been delighted by the level of support shown by investors for Redstone, reinforcing the belief Tony and I have in this business. This fundraising and refinancing will significantly strengthen the balance sheet, giving us a solid foundation to implement our revised strategy," said Smith.

"We are confident that we now have the platform in place to capitalise on opportunities in the ICT sector and deliver tangible value to shareholders," he added.

The firm will hold a General Meeting on 8 September to vote on the measures.

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