News blog
Oxonica
- BY: Andrew Hore |
- POSTED: 22/11/2007 |
Nanomaterials developer Oxonica has secured £4.2m to finance the continued development of its products.
Oxonica has been running out of money since Petrol Ofisi decided not to use Oxonica’s Envirox fuel additive and ended its relationship with the company in July. Management cut costs but it still needed more cash.
The money is being raised through two separate placings at 21p a share. The first tranche will be eligible for VCT and EIS relief but the second will not. Chairman Richard Farleigh is subscribing for £1.3m of shares. He will end up with 20.2% of the company. Three VCTs will invest £1m between them and end up with a combined stake in Oxonica of 25.4%. The total number of shares issued will be equivalent to just over 30% of the enlarged share capital.
Following the placing Oxonica’s will have cash of around £4.5m. The monthly cash burn is around £500,000 – suggesting the cash will last nine months. Management indicates that it is also looking for additional debt funding.
The cash will be used to further develop products and make progress with Oxonica Diagnostics. Longer-term, Oxonica needs to decide how to take the diagnostics business, which is one of the bigger cash drains, forward. The diagnostics business has enormous potential but Oxonica may need to find a partner or raise outside cash for it.
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