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SPI Lasers

  • BY: Andrew Hore |
  • POSTED: 16/10/2007 |

SPI Lasers has finally managed to raise the working capital it said it needed in August but it has come at a big cost in terms of dilution.

A placing at 30p a share will raise £8.5m net and Furukawa Electric Co is investing a further £2m at the same price. Furukawa is a Japanese quoted electronics company valued at £1.7bn and it believes the link up with SPI will help its own fibre laser interests.

This placing will more than double the number of shares in issue.

In July the shares peaked at 255p and even before the announcement of the placing they were trading at 85p. They fell 22.5p to 62.5p on the day of the announcement.

SPI wasn’t able to make a gross profit in the first half because of the sales mix and its inability to reduce costs as fast as it hoped to. There was a £5.1m cash outflow in the six month period and had net cash of £4m. SPI had raised £10.1m net at 200p a share in February. That cash was on the way to running out especially as the second half is expected to be similar to the first half. 

SPI believes it will move into profit before the end of 2008 but there is still a long way to go before that happens.

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