Proxama PLC (PROX.LN) shares plunged 66% on Friday after the company said it is raising around 5.3 million pounds ($6.8 million) in a highly discounted placing, as well as through an open offer, of a total of 17.65 billion shares.
The shares in the placing are priced at 0.03 pence each, an 80% discount to Proxama's Thursday closing share price of 0.15 pence.
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"The proposed fundraising will enable the company to become debt-free, as we transition to being a mobile data and location intelligence business," said Chief Executive John Kennedy.
The minimum the company needs to raise is GBP3.1 million, but if it doesn't succeed that through the placing and open offer, it will look for other ways to raise the money, it said.
With the money from the fundraising, Proxama will settle its GBP2.5 million loan with Barclays Bank PLC (BARC.LN) through a combination of cash and share warrants, it also said on Friday, adding that this will release it from all liabilities under the Barclays facility.
Proxama reported Friday a narrowed pretax loss for 2016 thanks to higher grant income and smaller administrative expenses.
The company made a pretax loss of GBP5.8 million in the 12 months ended Dec. 31, smaller than the loss of GBP6.1 million it made in the previous year. Revenue, however, fell to GBP1.8 million from GBP2.5 million.
Proxama is appointing Mark Slade as managing director, it said on Friday.
Shares at 0715 GMT down 0.09 pence, or 66%, at 0.05 pence valuing the company at GBP1 million.
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(END) Dow Jones Newswires
June 30, 2017 03:33 ET (07:33 GMT)