News blog
VPhase
- BY: Andrew Hore |
- POSTED: 06/10/2010 |
VPhase is raising £2m gross at 2p a share in order to help finance the commercial development of its voltage optimisation product.
Last week, when it was announcing its interim figures the management said that there was no immediate need to raise cash. However, with cash flowing rapidly out of the business, it makes sense to raise cash as soon as possible. The share price was around the placing price when the figures were published but it had moved ahead to 2.625p. At 2.375p a share, down 0.25p, the existing share capital is valued at £16.7m.
The additional cash will take pro forma net cash to nearly £2.9m, although the operating cash outflow in the past three months probably means the underlying figure is less than £2.5m.
The new shares are being placed with existing and new shareholders. Back in May 2008, VPhase raised £3.5m at 5p each. At that time, existing shareholders sold £1.6m worth of shares at the same price.
VPhase says that it will use the cash raised to expand in the UK and overseas. It will also need some for working capital.
The VX1 voltage optimisation product can save customers around 8-10% of their electricity bill. VPhase is hoping to negotiate contracts with utilities which would install the VX1. The stronger balance sheet will help in these negotiations.
Broker Nomura Code believes that the £2m will be enough to enable VPhase to reach profitability.
Energetix will have its holding in VPhase diluted from 49% to around 43%.
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