Trackwise Designs PLC (AIM:TWD) saw its shares plunge 81% on Wednesday after it announced heavily discounted fundraising plans which would see the AIM-listed group raise an initial £5.15mln.
In a statement, Philip Johnston, Trackwise CEO said it was “a matter of deep regret that we have found ourselves forced to come to the market on these terms.”
The manufacturer of specialist products using printed circuit technology had warned in September that lower production volumes would mean “additional funding will be required.”
The fundraising has three elements, a placing and subscription to raise £3.65mln, an open offer to raise up to an additional £1.5mln and a warrant issue to subscribers of the placing, subscription and open offer.
The placing and subscription would be at an issue price of 1p per share while the open offer is on the basis of 1 open offer share for every 0.250054 existing ordinary share held.
In addition, Trackwise proposes to issue warrants to subscribers in the placing, subscription and open offer granting rights to subscribe for one additional ordinary share for each warrant held in the ratio of one warrant for every two new ordinary shares.
These warrants are exercisable at a price of 6p per share. If all warrants are exercised, the company would receive additional gross proceeds of up to £15.44mln it said.
Proceeds will be used to provide cash through to the start of production of a new commercial order which was entered into with Trackwise's EV OEM customer in October 2022 while providing a contingency to deal with any potential risks associated with the start of production.
The company said its Stonehouse site factory refurbishment and fit-out is now largely complete and it expects to start production for the EV OEM customer in quarter one of 2023, with the first cash receipts for production parts seen in early April 2023.
In early trading, Trackwise shares were down 81.42% at 2.35p.