(Reuters) - Activist investor Gatemore Capital Management said on Monday it was leading a 24 million-pound ($31 million) financing for British mail, parcels and courier services company DX Group (DXDX.L), sending DX’s shares soaring.
DX said the fundraising was “time critical” to address the short-term cash position of the company which has become weak.
Gatemore, DX’s largest shareholder with a 23.8 percent stake, had previously opposed a plan for DX to buy the logistics arm of John Menzies (MNZS.L) for cash and shares in a deal which would have given Menzies majority control of the DX Group. The deal was called off in August.
In July the company had announced the immediate departure of its chief executive and finance director and a restructuring to separating the freight and courier delivery operations.
DX Group on Monday named Lloyd Dunn as its new chief executive with immediate effect. The company also said that Ron Series would be appointed as chairman and Russell Russell Black and Paul Goodson as non-executive directors on completion of the first tranche of the fundraising.
Dunn has also committed 5 million pounds to the new financing, with Hargreave Hale, an existing DX investor, having committed 7.5 million pounds, Gatemore said in an emailed statement.
Three other new directors are also personally investing, Gatemore said, adding that the announcement by DX of the four new appointments earlier on Monday marked “the successful end of an eight-month campaign by Gatemore to install these four independent nominees to the DX board”.
DX’s AIM-listed shares, which have slumped to just 8.5 pence from a 2014 high of 152 pence, were up 29.6 percent at 10.25 pence at 1203 GMT.
The company earlier warned its annual profits would be well below market forecasts and it would not pay dividends for the foreseeable future.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Greg Mahlich