UK flow battery developer REDT has posted a circular relating to a proposed share placing to raise over £3m to support a strategic review.
REDT announced the share placing on 14 March. The circular sets out the placing of 47,000,000 new ordinary shares and open offer of a maximum of 113,031,304 new ordinary shares, at a price of £0.02 per share.
The company’s board appointed VSA Capital as financial adviser to assist with the strategic review.
Neil O’Brien, previously a non-executive director, has become executive chairman and will lead the strategic review of REDT, while Jeff Kenna has stepped down as chairman but will remain on the board as a non-executive director.
REDT chief executive Scott McGregor has stepped down from the board but will remain with the business to run the operations.
The company has also initiated cost-cutting measures to ensure that the long-term value of the business is maintained during the strategic review. The focus is on closing and delivering large projects in UK, Germany and Australia.
A redundancy process has started which will see a 23% reduction in staffing levels with a corresponding 25% reduction in payroll costs.
On 3 October 2018 REDT announced it had raised £5.03m from a placing and would seek strategic partners to support and finance the continued growth of the business.
According to REDT its board reached an opinion that there is insufficient time to finalise the discussions with potential strategic partners “within the constraints imposed by the company’s cash position and continuing cash requirements.”
The board, therefore, launched a comprehensive strategic review to explore the options available to REDT to fund its business going forward.
REDT stated the funds raised from the placing will not be sufficient to see the company through to cash generation. It also remains the board’s opinion that to “fully capitalise on the significant emerging opportunities in the energy storage market, the business requires broader support from one or more strategic partners.”