SPECIALIST cleaning firm Proventec is expected to announce a fund-raising drive through the issue of new shares.
The Rodney Street-based group, which has developed steam cleaning technology to kill hospital superbugs like MRSA and C difficile, revealed moves to issue new equity when it confirmed a new £500,000 short- term borrowing facility.
Chief executive David Chestnutt explained that the AIM-listed company decided to resort to a loan due to a combination of factors, including missing out on an expected payment which was due at the end of March and loan note and interest payments that were due at the end of June.
He said the company decided, after consideration, that it was not appropriate to negotiate on the loan note, so the short-term loan was preferred instead.
A European institutional investor has provided the unsecured £500,000 facility to support the company’s working capital requirements up until September 30.
Anything drawn on the loan will bear an interest rate of 16%.
Mr Chestnutt also confirmed that Proventec has already sounded out the City regarding the issue of new shares in a bid to raise further funds.
He said: “We have been around the City for two weeks and have been well received by our existing shareholders. There will be an announcement about a new equity issue.”
Proventec’s last issue of new stock came seven months ago in December when almost 25,000 new shares were released linked to the acquisition of Netherlands-based CryoJet Industrial Services BV.
In a statement to the Stock Exchange, Proventec said: “The company confirms that it is considering a range of financing options including the potential issue of new equity and has received indications of interest from a number of existing and new shareholders.”
Proventec employs more than 130 staff working in healthcare, hospitality and food industry hygiene.
In March this year, it announced a £450,000 order from the Scottish National Health Service for its specialist steam cleaning machines.
At the same time, it revealed a £99,200 research and development contract with the same client to develop novel hand hygiene technology.
It said it will receive the funds on completion of the first phase of development and assessment of its design in September.
