Troubled graphene manufacturer Versarien has raised £650,000 through a stock market share placing as it continues its turnaround strategy.
Bosses at the Gloucestershire engineering firm, which makes products using the nanomaterial for the automotive, clothing, biomedical and aerospace sectors, said the proceeds would be used for working capital purposes and as bridge finance to extend its cash runway, as it looks to sell off some of its assets.
It comes after the AIM-listed company, which has previously secured partnerships with fashion label Superdry and kit suppliers of the England rugby team Umbro, said the tough economic conditions had delayed the commercialisation of its products.
Earlier this year Versarien posted a marginally widened loss of £8.4m for the 18 months to the end of September 2022, with co-founder Neill Ricketts resigning as chief executive soon afterwards. Its financial struggles have continued into its current financial year, with the business reporting a widened £3.4m pre-tax loss last month in its half-year results.
The company is currently pursuing a sale of equipment and intellectual property it acquired from South Korean firm Hanwha Aerospace in 2020 in a bid to cut costs, which it said had attracted “a number of interested parties”, though the timing of any sale and the amount of funding it would generate remained “uncertain”.
The board said chief financial officer Chris Leigh and chief technology officer Stephen Hodge had dealt 65 million new ordinary shares in the capital of the company at a price of 1p per share, under powers granted by shareholders at a recent meeting on the future of the business.
Mr Leigh said: "Following the passing of the resolutions at the general meeting held earlier this month, the board has decided that it would be prudent to raise further finance to assist in bridging to the proposed asset sales. We look forward to updating shareholders on continuing progress with the turnaround strategy in the coming months."
The £650,000 raise, reported before expenses, is the third share placing Versarien has made in recent months, with the business generating more than £500,000 in May and around £320,000 in March.
As part of its recovery plan, Versarien has streamlined its focus on the construction and textile sectors. The company’s graphene-enhanced concrete has been selected for a number of global trials, while it continues to supply Umbro and other sports equipment clients.
Non-executive chair Diane Savory said last month, based on certain asset sale assumptions, projections suggested Versarien would have “sufficient resources for a further period of 24 months”, though “nothing is certain in this respect”.
The business, which had employed between 100 and 120 people across its global operations, including 10 at its factory in the Forest of Dean, said in March its workforce had been reduced. It added that non-executive directors had also agreed “to waive any remuneration from the company indefinitely”, while executive directors' pay was also being reviewed.
Strategy and turnaround specialist David Stone and his firm Prompt Business Strategies have been appointed by the company on a consultancy basis.
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