Minorplanet to raise cash
LEEDS-based vehicle tracking group Minorplanet confirmed is to raise £3.25m through a share placing.
The Leeds company said the refinancing features a £1.15m placing, plus an open offer of about £2.1m, both at 30p per new share.
An open offer of around £2.1m new shares will be made to existing shareholders pro rata at a price of 30p per share.
Terry Donovan, chief executive of Minorplanet, said that the refinancing would allow the firm to “ride” the current economic storm and continue to build a platform for growth.
In April, the firm announced a marked downturn in revenues in its SME business leading it to report a loss despite a 169% increase in larger corporate sales.
It said that its full year results for the year ended August 31, 2009 will be significantly below market expectations.
At the time it said it was exploring options to address the group’s short-term funding requirements.
As well as the share placing announced today, Minorplanet has also converted its existing bank overdraft facility to an Enterprise Finance Guarantee Loan (EFGL).
A block discount on loan facilities has also been agreed with Siemens and ING and an agreement made in regard of money owed the HM Revenue & Customs.
Mr Donovan said: “The medium term prospects of the Company remain healthy and we should be well positioned to take advantage of the upturn when it happens.
“Established in 1996, Minorplanet is the founding father of the telematics industry in the UK.”
He continued: “We are keen to take full advantage of our unrivalled industry experience, product strength, market position and European presence to lead the consolidation of our fragmented industry and create growth. As a result of the downturn Minorplanet is already a more focused and leaner business.”
Minorplanet has been quick to take action including a 15% headcount reduction in the UK. Its Australian business has also seen an 18% staff reduction.
And despite trading difficulties, the firm has made progress in a number of key areas. Its Australian subsidiary was certified as an Intelligent Access Program (IAP) service provider in December.
IAP is the Australian government’s sponsored scheme for providing improved road network access for heavy goods vehicles and the approval is expected to help generate substantial growth for Minorplanet’s Australian business in the medium term.
Minorplanet’s agent in Malaysia and Singapore has secured two significant accounts which will enable them to have the potential to reach their target for the year;
Both the Dutch and German subsidiaries significantly reduced their losses and are now trading close to breakeven;
In the UK, the firm has won a number of key new contracts, particularly in the public sector.
The company has also continued to invest in its hardware and software functionality to maintain its position as a leading global provider of vehicle management systems.
