Flow looks to raise £23m to fire-up growth
CHESHIRE company Flowgroup is looking to raise up to £23m to ramp-up growth by launching a new version of its energy-generating domestic boiler.
The Capenhurst-based company, which is listed on AIM, has announced a £21m fundraise via a firm placing and an open offer to generate up to a further £2m. It wants to funds to accelerate the development of a combination version of its Flow mCHP boiler and reducing supply chain and production costs of its boilers.
The fundraising, which is being supported by its manufacturing partner Jabil which is going to invest £7.4m in the placing, would allow the development and eventual production of its combi boiler to rise from 400,000 to 1.7m units per year and also provide early entry into European markets.
In addition Flow plans to: reduce supply chain costs and upgrade systems to cut production costs; expanding its existing sales team to turn installers into resellers; upgrade systems and processes to enable management of a wider range of UK boiler installers; developing integrated smart home connectivity and exploiting its intellectual property through licensing.
The terms of the fundraising are for the placing of 73.68 million new shares at 28.5p each to raise around £21.m before expenses. The share are being placed by Investec Bank and Cenkos Securities. The
The Open Offer is for up to 7.04 million at 28.5p to raise up to £2.m. Qualifying Shareholders are entitled to apply for 1 Offer Share for every 34 Existing Ordinary Shares.
Chief executive Tony Stiff said: “We have demonstrated significant progress towards the commercialisation of Flow’s product division, alongside the success of our Flow energy division.
“The board believes now is an appropriate time to accelerate the development and delivery of a range of low cost mCHP combination and system boilers.
“These developments would significantly expand the number of homes that Flow mCHP boilers can be installed into and accelerate the rate of doing so; we believe the Flow mCHP combination version can be in production by H2 2016, a year in advance of the current plan with current resources.”
Ian Gillis and Mercy Mba of law firm Hill Dickinson acted for Cenkos and Investec and Phil Barry and Ryan Tweedale of Atticus Legal acted for Flowgroup on the placing and open offer.
