Optare to raise £7.4m for factory move
BUS manufacturer Optare is planning to use a £7.4m share placing to relocate its Leeds factory, the company said today just days after announcing a major order.
Optare had last month warned that the lease on its Leeds factory was not expected to be renewed beyond the end of 2011 and it was looking to relocate to a “new local facility”.
In a stock market update this morning, the company said it would cover the cost of the move with a £7.4m share placing.
The cash will also be used to provide working capital and reduce the company’s debts.
Optare said it is in the advanced stages of raising £7.4m by placing 370 million shares at 2p to institutional and other investors.
The shares closed at 3.25p on Friday when it announced a £7.6m contract win for 68 single and double decker buses.
The order is for replacement fleet vehicles from an un-named British transport operator, and begins this year. The firm’s order book now stands at more than £43m.
Optare said it had also entered into a second loan facility agreement, for up to £750,000 with the parent company of one of its major shareholders. This is likely to be the Indian Hinduja Group, parent company to Ashok Leyland which took a 26% stake in Optare in the summer.
In December it took a £1.5m short term loan from the investor. Both facilities carry interest of 8% over the base rate.
