Sarantel (LON:SLG) has raised £2 million via a placing to boost its dwindling cash resources and secured a three year £5 million facility from Darwin.
The AIM listed manufacturer of filtering antennas for wireless devices announced today that Seymour Pierce placed 429.5 million shares in Sarantel at a placing price of 0.5 pence per share, which represents a discount to yesterday’s closing price of 0.7 pence.
The company had £0.4 million in the bank as at 31 March 2011. The net proceeds of the placing will enable Sarantel to expand its sales and marketing operations as well as provide funds to invest in research and development.
Earlier this year, Sarantel reported that its sales suffered a setback in the first half when its largest GPS customer failed to place production orders because of a technical problem with their best selling product. As a result, the group’s revenues dropped to £1 million from £1.4 million in the first half of 2010.
However, GPS revenues during the same period rose 1 percent as the group worked on expanding its customer base.
Revenues for Sarantel's rugged L1/L2 GPS antenna were also delayed following a customer's technical problem not related to Sarantel’s equipment. The company said that this problem has now been fixed and orders have been placed, with deliveries scheduled in the second half of the current financial year.
The company added that it continues to see momentum in the military GPS market after revenues from that segment jumped 26 percent during the first half.
Sarantel is currently tracking more than 200 different sales opportunities in a broad range of GPS applications, which it believes should deliver significant revenue growth in the next two to three years.
Under the terms of the facility with Darwin, Sarantel can draw down up to £1 million at any time. The subscription price of shares for Darwin will be at a 5 percent discount to an agreed reference price during 15 days prior to the delivery of a subscription notice.