PhotonStar LED Group PLC (LON:PSL) has raised gross proceeds of £100,000 from a placing of 500,000,000 new ordinary shares with new and existing investors at a price of 0.02p each.
The group said the net proceeds will provide the company with additional working capital and will also enable its board to initiate a further cost reduction programme and to evaluate new business opportunities.
The placing – which was undertaken by the company's joint broker Peterhouse Capital - will also strengthen the company's balance sheet, it added.
Photonstar shares closed trading on Thursday at 0.06p.
Last month, the group’s fixed LED lighting subsidiary, PhotonStar LED Limited, has been placed into liquidation.
PhotonStar had warned investors at the end of October that trading conditions for the subsidiary “continued to be very challenging” and that it was weighing up its options, which included a distressed sale.
The PhotonStar LED subsidiary generated the majority of the group's revenues, accounting for £1.15mln of the £1.33mln reported for the first half of 2018 but it also incurred the majority of the group's trading losses.
The group's trade finance facility borrowing was with the subsidiary, so its debts should be significantly reduced as a result of the unit going into administration.