Mercury seeks cash to charge into batteries market
MERCURY Recycling, the Trafford Park-based company which recycles fluorescent light bulbs and tubes, has announced plans to raise £175,000 through a placing of new shares to Westleigh Investment Holdings – a company which will become a “strategic investor” with the company and own a 29.9% stake if the deal is approved by shareholders.
Westleigh is subscribing for 1,701,308 Ordinary Shares at a price of 10p each and 8,399,996 warrants each at a price of 0.25p.
The warrants allow the firm to subscribe for an ordinary share at 10p each once the company’s price had averaged 15p for a period of at least 30 consecutive days.
The company said that the money would be used “to explore growth opportunities” in areas such as battery recycling, which it wants to pursue in the light of a new EU Battery Directive.
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The firm said it was “considering ways of increasing the group’s battery collection, sorting and recycling service”, including the possibility of setting up or acquiring complimentary businesses in the recycling sector.
It added that Westleigh’s directors Giles Clarke and Nick Harrison would join Mercury’s board once the placing is complete. If this takes place, current non-executive directors Joe Dwek and Anthony Leon could resign at the firm’s next AGM.
The firm announced its proposals after revealing a 32% drop in pre-tax profits in the six months to June 30 to £154,000 as its sales fell by 9% to £1.33m.
Chairman Lord Barnett said that he believed Clarke and Harrison’s appointment would “help to transform the future of the group”.
“They have a successful track record, and are very well respected in the City,” he said. “This, together with the strategy broadly spelt-out in today’s statement, can only help to move the group forward even faster than envisaged by the recycling industry.”
He argued that the interim figures were “very good considering we are still affected by the recession” and the cold weather during January.
“All industry was of course affected, but we were hit particularly hard, as our vehicles were simply unable to collect lamps for recycling, and our business virtually stopped.
He added that the new EU Battery Directive offers new opportunities for the firm. The company also said that its cash balance continued to improve every month. At the beginning of the period it had an overdraft of £71,000 but it finished with a surplus of £38,000.
