Last checked at 16 Dec 2009 07:00
16 December 2009
Carclo plc
("Carclo" or "the Company")
Issue of Equity
Placing to raise £ 3.67 million before expenses
The Board of Carclo is pleased to announce today a cash placing of 2,858,000 new Carclo ordinary shares of 5p each in the Company ("Placing Shares") at a subscription price of 128.5 pence per share (the "Placing"). The Placing Shares, which equate to approximately 4.96% of the current issued share capital of the Company, have been placed by Brewin Dolphin Limited with institutional investors. Immediately following the Placing, the Company's issued share capital will consist of 60,518,702 ordinary shares of 5p each.
The funds raised from the Placing, totalling £3.67 million before expenses, will be used to accelerate a number of growth projects principally in Carclo's technology business, Conductive Inkjet Technology ("CIT").
On 8 December 2009 Carclo and CIT announced that they had signed a binding agreement with Atmel Corporation ("Atmel") for the development and launch of an innovative new touch screen product based on CIT's patented photolithographic metallisation film. Atmel (NASDAQ: ATML) is a worldwide leader in the design and manufacture of capacitive touch screen solutions and microcontrollers with a broad portfolio of related intellectual property. This product will be developed for use in mobile phones and other electronic devices. CIT will be installing a new production line at its Cambridge facility to produce touch screen sensors with a view to volume production commencing in 2011.
Under the terms of the agreement, Atmel has secured preferential access to CIT's production capacity and technology with a payment of US$1 million. To preserve the preferential access to this capacity, Atmel has agreed to minimum annual volume targets for calendar years 2011 and 2012. If these minimum targets are achieved, there will be a material positive impact on group profits for the financial years to March 2012 and 2013. Over the next two years Carclo will invest up to £2 million on the production line and an associated expansion of CIT's clean room facilities. In addition, it is anticipated that the project will result in an increase in Carclo's working capital requirements.
CIT also has a number of other exciting projects, in several different application areas, which are now being driven towards commercialisation. These include our Technology Strategy Board project with Cambridge Display Technology which uses CIT's fine lines to produce OLED lighting panels.
Carclo continues to invest in its strategy to grow its medical and optical businesses and the Company can meet the capital required to grow these businesses from its operational cash generation. However, the growth opportunities provided by CIT, which are potentially transformational for Carclo, require additional levels of capital. Carclo's medium term loan facilities do not expire until June 2012, however, our financial strategy is to continue to reduce the amount of group debt in the period leading up to the group's next re-financing. It is appropriate therefore, that Carclo looks to its equity shareholders to fund these exciting growth opportunities through an issue of new shares.
The Placing Shares will be issued fully paid and will rank pari passu in all respects with the existing ordinary shares. Application will be made to the UK Listing Authority (the "UKLA") for the Placing Shares to be admitted to the Official List maintained by the UKLA and to be admitted to trading by the London Stock Exchange plc on its main market for listed securities and this admission is expected to take place on 22 December 2009.
Trading at Carclo has continued in line with the Board's expectations since the issue of its Interim Results Announcement on 24 November 2009.
| Carclo plc | 01924 268040 |
| Ian Williamson, Chief Executive | |
| Robert Brooksbank, Finance Director | |
| Brewin Dolphin Investment Banking | 0845 213 4730 |
| Andrew Kitchingman | |
| Sean Wyndham-Quin | |
| Weber Shandwick Financial | 020 7067 0700 |
| Terry Garrett / Stephanie Badjonat / Clare Thomas |
Forward looking statements
Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events to differ materially from any expected future events or results referred to in these forward looking statements.