2nd Feb 2009 07:00
The information contained in this announcement is restricted and is not for publication, release or distribution directly or indirectly, in or into Canada, Japan, the United States of America, the Republic of Ireland, Australia or the Republic of South Africa
2 February 2009
Corac Group plc
("Corac" or the "Company")
Placing of up to 7,662,835 Ordinary Shares
at 13.05 pence per Ordinary Share
to raise approximately £1.0 million
The directors of Corac (the "Board"), the intellectual property, engineering and licensing company specialising in compressor technology, are pleased to announce a placing of up to 7,662,835 new ordinary shares of 10p each ("Ordinary Shares") in the capital of the Company ("Placing Shares") at 13.05 pence per Ordinary Share to raise approximately £1.0 million net of expenses (the "Placing") assuming full subscription from private investors.
Background to and reasons for the Placing
In line with the Company's strategic plan of developing and commercialising the Downhole Gas Compressor ("DGC") technology, the Board has considered it appropriate to raise further equity capital to strengthen the Company's balance sheet and provide additional working capital. The Board believes that additional financial resources will reduce risk arising from the delay in the deployment of the DGC to field trial, as announced on 16 December 2008. Additionally, it believes Corac's ability to fulfil further orders for its turbo boosting machines from industrial air customers will be strengthened.
The Placing
The number of Placing Shares does not exceed the number of Ordinary Shares which the directors of Corac are currently able to allot and which can be allotted free from statutory pre-emption rights under the existing authorities from Shareholders passed at the annual general meeting of the Company held on 28 April 2008. The Placing is conditional on, inter alia, the admission of such shares to trading on AIM becoming effective.
Application will be made for the admission of the Placing Shares to trading on AIM ("Admission"), which it is expected will occur on 16 February 2009.
Assuming full subscription, the Placing Shares will represent approximately 8.13% of the enlarged issued share capital of the Company immediately following Admission (comprising 94,212,157 Ordinary Shares in aggregate) and each will be issued credited as fully paid and free from all liens, equities, charges, encumbrances and other interests and will, when issued, rank in full for all dividends and distributions thereafter declared, made or paid after Admission and otherwise rank pari passu in all respects with, and carry the same voting and dividend rights as, the existing Ordinary Shares. The Placing is not underwritten.
Gerry Musgrave, CEO, commenting on the Placing said:
"We are delighted to have received support from existing investors in the current environment. With good progress being made with our DGC towards field trials later this year and growing interest in our industrial air machines, it is important that risks relating to commercialisation are minimised with strengthened financial resource. We are at an exciting time in our development and we look forward to the future with optimism."
For further information please contact:
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Professor Gerry Musgrave |
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Executive Chairman |
01895 813463 |
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Richard Darby, Ben Romney |
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Buchanan Communications |
020 7466 5000 |
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Ivonne Cantu/Camilla Hume - Corporate Finance |
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Christian Hobart - Sales |
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Cenkos Securities plc |
020 7397 8900 |
NOTES TO EDITORS
Corac is an intellectual property, engineering and licensing group which holds many patents. It focuses on high speed electrical direct drive turbo machinery based on its unique expertise in gas bearings. Corac has created an innovative 'no oil' turbo compressor together with a unique gas seal, and is part of a joint industry programme for the downhole gas extraction industry.
Further information on Corac is available on the internet at www.corac.co.uk
Related Shares:
TPG.L