LONDON - Electric Guitar PLC (LSE: ELEG), a digital marketing firm specializing in first-party data solutions, has announced that its main trading subsidiary, 3radical Limited, is to be placed into administration. The decision comes after the unexpected termination of investment negotiations and revised trading projections indicating a need for more funding than available.
The Board of 3radical has engaged KRE Corporate Recovery Limited to facilitate the sale of its business and assets as a going concern. This process is anticipated to result in a pre-packaged sale to a buyer with the resources to sustain the company's operations and realize its long-term potential.
In the seven months since Electric Guitar acquired 3radical in May 2024, it has executed its buy and build strategy, successfully merging with Mymyne Ltd in August. This acquisition brought cost-saving synergies and additional intellectual property to the Group. Despite these efforts, the company's share price has fallen, limiting its ability to pursue further acquisitions and making equity fundraising challenging.
Electric Guitar has invested significantly in sales, marketing, and product development, including the Voco Solutions Portal, which streamlines client installations. Although the fruits of these investments are beginning to show, the need for additional capital has become pressing.
Negotiations with potential investors, primarily based in Singapore, fell through following a recent decline in Electric Guitar's share price. Prospective investors withdrew, citing concerns over the liquidity of AIM-quoted companies, despite ongoing interest in the company's business.
The Board concluded that without immediate substantial funding, 3radical would be unable to meet its financial obligations, despite a positive long-term business outlook. KRE has been instructed to find a buyer with the necessary resources to continue 3radical's trading activities.
Electric Guitar is seeking further advice regarding its financial position and will update the market as soon as possible. This announcement is based on a press release statement.
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