DLA Piper advises Chamberlin on critical GBP3.5m fundraising

DLA Piper has advised Chamberlin plc (Chamberlin), the Walsall-based specialist castings and engineering group, on its placing and subscription of 58,333,333 new ordinary shares raising GBP3.5 million.

In early December 2020, Chamberlin announced that a major customer had served notice of its intention to cancel all contracts, and since then DLA Piper’s Restructuring and Corporate teams in Birmingham (led by partners Huw Dolphin and Rob Newman) have been supporting the Chamberlin board on its strategy and options to strengthen its balance sheet. The immediate impact on Chamberlin was the inability to conclude the audit of its accounts for the year ended 31 March 2020 (FY 2020 Accounts), which led to the suspension of its shares trading on AIM on 4 January 2021.

In February 2021, a new investor (and now Non-Executive Director), Trevor Brown, was issued with a GBP200k convertible loan note which converted into 29.5% of the share capital following a reorganisation of the share capital at a shareholder meeting held on 8 March 2021.

This latest fundraising of GBP3.5 million represents approximately 417 per cent of the issued ordinary share capital of the company prior to the transaction. The primary purpose of the Placing and Subscription is to fund working capital and to meet Group restructuring costs. Further, the Board believe that they will be able to demonstrate to the Company's auditor (and creditors) that Chamberlin is able to continue to trade on a going concern basis in order to be able to publish and file its FY 2020 Accounts and apply for the suspension of trading of its shares on AIM to be lifted by the London Stock Exchange.

DLA Piper’s Birmingham-based Corporate partner Rob Newman and associate Kirsty Underhill led on the fundraising whilst Gowling LLP advised Cenkos Securities plc and Peterhouse Capital Limited, who acted as joint bookrunners to the placing.

Commenting on the transaction, Rob Newman said: “We are delighted to have been able to continue to support Chamberlin through what has been one of its most challenging periods of its over 100 year history. This latest fundraising will not only hopefully result in its FY2020 audit being completed and the re-listing of its shares on AIM, but also allow the board to now concentrate on executing their restructuring strategy to ensure the survival of this important Midlands based business.”