31st Mar 2014 13:31
LONDON (Alliance News) - Opsec Security Group PLC Monday said it is proposing to raise about GBP7.0 million before expenses through a placing and open offer, money it will use to reduce borrowings, fund a plant closure, and ensure it is able to handle the higher levels of new business it is winning.
In a statement, the company said it will issue 21.2 million new shares at 33 pence each. Two thirds have been placed with Orca Holdings Ltd and the other third with Herald Investment Trust. Up to 12.1 million shares will now be made available under the open offer.
The deal, which is expected to result in new proceeds of about GBP6.8 million, needs to be cleared by Opsec's shareholders at a general meeting April 17.
The anti-counterfeiting technologies and services supplier company has said that it is winning more new business after it invested in sales and marketing. It is also closing a plant in New Jersey that it owns after acquiring the holographic security business of JDS Uniphase Corp in 2012.
Opsec, which said it is continuing to trade in line with its own expectations, had breached a covenant on borrowings with JP Morgan Chase after delivery dates with some key customers slips and the supply chain for its transaction card business was disrupted.
In January, the company reached an agreement with JP Morgan Chase meaning its financial covenants would next be tested against its financial results for the year ended March 31, 2014.
Monday, it said it had signed an amendment to its facilities with JP Morgan Chase, conditional upon completion of the capital raising, which resets the amortisation schedule of the remaining balance due to the bank and resets the financial covenants. That means Opsec will be in compliance with all of its obligations under the amended JP Morgan Debt facility once the capital raising is completed.
Opsec Security Group shares were down 5.7% at 33.00 pence Monday.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
OSG.L