LONDON (Alliance News) - RedT Energy PLC on Thursday said it intends to raise GBP3.2 million before expenses while it explores the options available to fund the business going forward.
The energy storage company has proposed 47.0 million share placing at a price of 2 pence each as well as issuing 113.0 million shares under an open offer at the same price.
The issue price represents a discount of 45% to the closing middle market price of 3.63p per share on Wednesday.
RedT Energy shares were trading 48% lower on Thursday at 1.91p each.
In October last year, RedT said it would seek strategic partners to support and finance the continued growth of the business. Since then, the company said it has been in, and remains in, active discussions with a number of interested parties.
However, the company sad there is insufficient time to finalise the discussions within the constraints imposed by its cash position and continuing cash requirements.
RedT has therefore launched a comprehensive strategic review to explore the options available to the company to fund its business going forward. At the beginning of March, the company had available cash reserves of GBP1.7 million.
The company said it is looking to raise at least GBP1.5 million via placing and open offer to fund business operations for the next four to six months.
RedT noted that in the event that the proceeds of the fundraising are less than GBP1.5 million, before expenses, the fundraising will not be completed.
The company also said it intends to implement the cost cutting programme to reduce the average rate at which it consumes cash on operational expenses, including personnel, premises and administrative costs to below GBP500,000 per month.
In addition, RedT said Neil O'Brien, previously a non-executive director, has become executive chair and will lead the strategic review. Therefore, Jeff Kenna has stepped down as chair but will remain on the board as a non-executive director.
Chief Executive Scott McGregor has stepped down from the board but will remain with the business to run the operations.
Redt said several directors will take part in the fundraising, with O'Brien subscribing for 1.8 million shares, worth GBP35,000, while Kenna acquires 875,000 shares, totalling GBP17,500.
Chief Financial Officer Fraser Welham and McGregor will buy 250,000 shares each, raising GBP10,000 in total.
Non-Executive Directors Michael Farrow and Jonathan Marren will subscribe for 375,000 shares and 50,000 shares, respectively, raising a total of GBP8,500.
