Haydale Graphene tumbles over heavily discounted placing
By Iain Gilbert
Date: Friday 22 Feb 2019
(Sharecast News) - Haydale Graphene has begun discussions with lenders regarding a fundraising at a significant discount to its recent share price.
The advanced materials outfit, helped by broker Arden Partners, intends to raise £7.8m in order to shore up its finances as losses continue to widen.
Although its shares closed Thursday at 11.8p, Haydale announced a £3.8m placing at just 2p per share and a further £4m by way of an open offer at the same price, along with the sale £0.2m of subscription shares. Later in the day the company announced that the placing had been "oversubscribed".
The AIM-listed group, which raised £1m in December thanks to a £750,000 loan from the Development Bank of Walesa and a £250,000 share subscription, will use the money raised from the placing to fund general working capital, restructuring costs and investment in equipment.
In terms of its results, Haydale saw revenues fall 20% to £1.64m in the six months ended 31 December, resulting in a 26% widening of pre-tax losses to £3.47m.
Haydale said it had made a "significant investment" in production capabilities at its US site in order to manufacture new silicon carbide cutting tools to increase sales and improve gross margins.
Interim chief executive David Banks said: "There will be a marginal impact on sales in the current financial year as the changes are bedded in.
"We are looking to leverage our significant investment made in our US business to create a stable platform for the group to enable us to achieve our plan to profitability."
As of 1200 GMT, Haydale shares had nosedived 74.48% to 3.03p.
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