Minorplanet spins
Shares in Minorplanet plummeted dramatically as it announced it would go bankrupt if its share placing and open offer were not fully taken up.
The company provides vehicle tracking systems to fleet operators. Clients include Boots and Harrods.
It has placed 21m new ordinary shares with institutional investors, raising £10.5m. It has also made an open offer, also at 50p a share, to raise about £3m before expenses.
Its price plummeted by more than 70 per cent to 0.61p, and the shares are to be consolidated on the basis of one new share for every 125 already held.
The company said: “Shareholders should note that the funding being provided under the placing is essential to the continued viability of the company.” It added: “The group does not have sufficient working capital for its present requirements. If the placing does not proceed to completion for any reason, the company will run out of working capital on or around 14 November.”
Minorplanet owes £4.82m to GE Capital Equity Investments and to its chief executive Terry Donavan. It owes £1.7m to other principal creditors.
Chairman David Perry said the money raised would complete the turnaround initiative, accelerate the company’s growth plans, and provide financial stability, after the company had repaid some of its debts.
Perry added the company plans to move from a main market listing to one on AIM, and hopes to start trading there on 10 November.