Cantono says that it expects to be able to raise the cash it needs through a share placing.
The data centre operator needs extra cash to finance capital expenditure. Management originally thought that it might have to raise the cash through a convertible loan note but it believes it can do it through a straight share issue. Longer-term, this should be significantly less dilutive than a convertible loan note which would be converted at a later date into shares at a fixed price.
The shares still slumped 3.5p to 6p each after the news – the shares were trading at 14p each prior to the original announcement of the fund raising. That values Cantono at £1.74m. Cantono wants to raise £10m so it will be a highly dilutive share issue.
The general meeting to gain shareholder agreement to the increase in share capital and the share issue will be held on 29 October 2008.
© 2021 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.