Plastics Capital, the niche plastics products group, today announces a conditional Placing to raise approximately £3.74 million, before expenses, by way of a Placing of 3,194,445 new Ordinary Shares at 117 pence per Placing Share.
The net proceeds of the Placing, which are expected to amount to approximately £3.54 million, are to be applied, in part, towards the proposed increase of the Company’s stake in the CCM Group, its US based minority investment focused on the production of creasing matrix. In addition, part of the net Placing proceeds will be invested in other parts of the Group in order to increase capacity to satisfy increasing demand for the Group’s products and thereby accelerate organic growth.
Application will be made for the Placing Shares to be admitted to trading on AIM at 8.00 a.m. on 31 May 2017. Following Admission of the Placing Shares, the total number of voting rights in the Company is expected to be 38,945,151.
The net proceeds of the Placing will be augmented by the decision of the Board to suspend dividend payments for at least the next two scheduled payments. The Directors estimate that this will result in a cash saving of approximately £1.7 million. It is intended that the cash saving will be re-invested in the business, alongside certain of the net proceeds of the Placing. After 12 months, the Directors will reconsider the payment of dividends within the overall context of capital allocation decisions then facing the Company.
Faisal Rahmatallah, Chairman and CEO of Plastics Capital, commented:
“We are very pleased to announce an oversubscribed £3.74 million placing with institutional Shareholders, at a small discount to the prevailing market price, which when added to the cash saving from the suspension of dividend payments, will be applied towards the proposed increase of our stake in the CCM Group and increasing investment in a number of growth areas including capacity in our mandrels, bearings and films businesses.”
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