LONDON (ShareCast) - (Sharecast News) - Pennant International said on Tuesday that it plans to raise £1.25m through an underwritten subscription of new shares to support investment in its software suite and bolster working capital, while reducing its overdraft facility.

The AIM-traded systems support software and training solutions provider said it would issue 5.81 million new shares at 21.5p each, a 4.4% discount to its 12 September closing price, in a two-tranche subscription open to certain major shareholders and potentially directors and employees.

It said Brett Gordon, an existing 12.1% shareholder, was underwriting the raise.

Pennant said the proceeds would allow it to reduce its HSBC overdraft from £2m to £1m from 1 November, while continuing capital expenditure on its Auxilium software platform and providing additional working capital.

The first tranche would raise £929,531 under existing authorities, with a second conditional tranche of £320,469 subject to shareholder approval to disapply pre-emption rights at a forthcoming general meeting.

Results of the subscription and details of the meeting were expected by 22 September.

Under the underwriting agreement, Gordon had committed to take up any shares not subscribed for by others, and would be guaranteed at least 60% of any unsubscribed shares.

He would receive a 4% underwriting fee on the gross proceeds excluding any raised from directors or employees.

Pennant said its board, having consulted with its nominated adviser, considered the terms of the underwriting agreement - which constitutes a related-party transaction under the AIM rules - to be fair and reasonable for shareholders.

At 1455 BST, shares in Pennant International Group were down 6.44% at 21.05p.

Reporting by Josh White for Sharecast.com.

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