County Durham tech firm Kromek is tapping up investors for £13m to help drive forward its growth plans.
The Sedgefield business, which also has a US site, has announced a conditional firm placing, directors’ subscription and open offer to raise up to £13m before expenses.
The firm placing is being carried out with new and existing investors in the NETPark based company, which supplies detection technology focusing on the medical, security screening and nuclear markets.
It plans to raise £10m through the firm placing and directors’ subscription, through the issue of 66,666,667 shares at 15p a share.
Meanwhile the proposed open offer has been launched to raise up to £3m through the issue of up to 20,288,064 shares to qualifying shareholders at 15p a share.
In a stock market announcement, Kromek said the net proceeds will be used to de-risk and commercialise its bio-security and pathogen detector, as well as allowing it to ramp up its commercialisation rate.
Kromek also wants to expand sales and marketing for the group’s nuclear detection and medical imaging activities, and to strengthen the balance sheet, giving it flexibility to address and capitalise on current and emerging opportunities.
Kromek chairman Rakesh Sharma said: “We thank our current and potential new shareholders for their commitment and interest in supporting Kromek. This investment will help us with our next phase of growth and to become cash flow positive and achieve operational profitability.
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“These funds in the short term will enable us to accelerate the commercialisation of our biological threat detection technology as well as the delivery of our nuclear detection and medical imaging pipeline.
“As such, the board recommends all shareholders to vote in favour of the proposals, which will allow us to capitalise on the substantial opportunities with which we are presented.”
Before it can take place, the fundraise needs shareholder approval at its general meeting on March 1.
The fundraise comes a month after the Kromek published interim results for the six months ending October 31 2020, which showed turnover fell from £5.3m to £4.58m, while operating losses widened from £2.3m to £3.1m.
It said business activity had been hit by the coronavirus pandemic, but trading began to improve in September and October as business patterns began to return to normal, with a number of sectors presenting strong opportunities for the company.