The technology firm Minorplanet, which makes black boxes to track vehicles using satellites, revealed a plan to step out of debt yesterday with a placing and open offer of new shares to raise £12.4m.
Minorplanet will need to use the funds for its cost reduction programme, which is estimated to cost a total of £1.5m, after going £400,000 over what was originally forecast. The company plans to use part of the new money to fund an initiative to take its systems on the web, and as general working capital.
Rob Kelly, the chief executive, said money from the offer would be used to pay its bank for an overdraft of approximately £4.6m, and to pay back a loan from its biggest shareholder, GE, worth £2.5m. Minorplanet will issue 66,666,666 shares at 21p each in a deal underwritten by Investec Securities, the investment bank. The stock was worth 76p in December when the company said it needed extra funds. It had set itself a deadline of the end of March to raise the additional finance.
The company has been trying to get out of the red since last year after bringing in Mr Kelly as chief executive last May. It has since been hit by disappointing returns at its franchises, overspending on restructuring, and the costs of a legal dispute with one of its suppliers. The group has also experienced delays in payment from its 50 per cent-owned arm in the Asia-Pacific region.
Mr Kelly's damage control strategy has so far included selling off interest in Firstnet Services, and pulling out of the US subsidiary MPUSA. The company also tried to turn around its French and Spanish interest by converting them into franchises.
He also hinted at a possible sale of Minorplanet's Italian business. "I can't say it won't happen. It's possible. We're reviewing our options," he said. He ruled out any expansion plans for the moment.Reuse content