Corac seeks £20m

Shares in compressed air technology developer Corac have lost more than one-quarter of their value after the company admitted that it wants to raise £20m. Corac would raise around £15m from a placing at 15p a share and give existing shareholders the chance to participate in an open offer raising a further £5m at the same price. If it goes ahead, this share issue will more than double the number of shares in issue. Corac wants the cash to help to commercialise its technology. In August, Corac signed a development agreement with a US-focused oil and gas company worth up to $1.5m, with an upfront payment of $750,000. Corac will trial its Downhole Gas Compressor on a depleting well. This is the second field trial of the technology. Corac is talking to a potential Middle East partner about another use of its compressor technology. Corac raised £4.7m at 42p a share in December 2007 and then £1m at 13.05p a share in February 2009. The most recent fundraising was in September 2009 when M&G Recovery Fund invested £4.7m at 35p a share.