AssetCo seeks equity and secures contract

AIM-quoted outsourced fire services provider AssetCo is trying to raise up to £8m from existing and new shareholders in order to provide the short-term funding it desperately needs. AssetCo believes that the financial problems should be temporary. It ran into trouble when the refinancing of non-recourse asset financing facilities was delayed. The company still hopes to secure a refinancing and release a further £8.5m for the business. There was good news later in the day when AssetCo said that its joint venture with Emirates Advanced Investments has been awarded a £120m, five-year contract by the GHQ UAE Armed Forces. The contract is to provide outsourced firefighting services. AssetCo expects to generate £40m of revenues over the five year contract and there is a potential five year extension. To put that in perspective AssetCo generated revenues of £17.1m in the six months to September 2010.It is unclear how much working capital this deal may require in its early stages. The share price has halved other the past month because of the financial difficulties, which also led to the ending of bid talks.