By Christian Moess Laursen
XP Power has announced plans to raise funds and improve its capital position through a premium share placing and retail offer. The company intends to raise £43.9 million ($54.4 million) through a share placing at a fixed price of 1,150 pence per share. In addition, there will be a retail offer for the subscription of shares, with a value of up to £1.5 million, at the same price as the share placing. This move comes after the company has reached an agreement with its lenders to amend the covenant of its $255 million revolving credit facility.
Fund Allocation and Utilization
The raised funds, totaling £45.4 million, will primarily be used for the following purposes:
- Reducing net debt
- Improving liquidity position
- Refinancing capital investments
- Continuing investments in research and development
XP Power aims to reduce its net debt and enhance its overall financial stability. The company recognizes the importance of maintaining a strong liquidity position and seeks to strategically manage its capital investments. Additionally, it emphasizes continued investment in research and development to drive innovation and future growth.
Premium Shares at Competitive Price
The fixed price of 1,150 pence per share represents a 6.1% premium over the closing price on Friday, offering an attractive opportunity for investors to acquire shares at a competitive value.
XP Power is committed to providing a rewarding investment experience for both institutional and retail investors, ensuring they have equitable access to shares at a fair price.
Covenant Amendments Show Commitment
XP Power's agreement with its banks to amend the covenant of its revolving credit facility demonstrates its dedication to maintaining a strong financial standing. This covenant amendment offers the company flexibility and stability as it progresses towards its growth objectives.
Looking Ahead - Cost Reduction Program
Last month, XP Power initiated a comprehensive cost-reducing program aimed at optimizing its operations. The program includes job cuts, expected to generate savings of £8 million-£10 million by fiscal year 2024. These measures will contribute to the company's overall financial improvements and further strengthen its capital position.
XP Power is dedicated to achieving sustainable growth and remains committed to delivering value to its stakeholders.
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