LONDON (Alliance News) - Ceramic Fuel Cells Ltd Monday said it hopes to raise about AUD13.7 million before costs in a three-for-five rights issue, money it will use to raise more working capital, increase sales and marketing spend, fund research and product development, and drive down manufacturing costs by doing more engineering.
In a statement, the developer of fuel cell generators that convert natural gas to electricity for homes and other buildings, said it will issue up to 1.5 billion shares on the basis of three new shares for every five existing shares at a price of 0.90 cents each.
It will also grant up to 764.8 million options. Each option will give the ability to subscribe for a new share for every two of the new shares it is issuing. The options are exercisable on or before October 30, 2015 at an exercise price of 1.1 cents a share.
Earlier this month, it said it had reached a milestone for its BlueGEN small-scale electricity generator. Ceramic said its service partner, Eneco Holding NV, has commissioned a BlueGEN unit in the Netherlands, making it the 500th unit installed. Earlier in the month the BlueGEN fleet passed 5 million accumulated operating hours.
The company has been going through a revamp, driving down costs to stem the cash outflow, and focusing its sales strategy towards developing larger scale projects rather than focusing on direct sales. It said the revamp has led to a 20% fall in operating costs over the last six months.
In July, Ceramic Fuel Cells said it had cut its net operating cash outflow during the fourth quarter of its last financial year as sales rose and it made progress on cutting costs, and it also said it is in talks about developments that may lead to it becoming a multiple product business, without giving further details. Still, it reported a widened loss for the financial year as a whole as higher costs for manufacturing, installation and maintenance of its electricity generators more than offset a revenue increase.
In its last financial year, it raised AUD12.0 million in an equity issue and AUD0.5 million by issuing convertible loan notes. It also got a AUD4.0 million tax refund against research and development expenditure in fiscal 2013, and is expecting a refund of the same amount for fiscal 2014.
Ceramic's shares were down 17.8% at 0.555 pence on AIM Monday morning. The stock fell 8.3% to AUD0.0110 on the Australian Securities Exchange.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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