KleenAir Systems (KSI.L) - raises cash at the start of the LEZ KSI.L
Comment by Objective Capital , Feb 07, 2008 Questions?
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KleenAir Systems has announced a placing of up to 7,204,000 new Ordinary 1p shares at 15.75p per share, raising up to £1,134,630.
Objective's view:
This placing and capital raising will allay any concerns that KleenAir might have been close to exhausting its cash reserves while it continues to provide retrofit solutions for vehicles seeking compliance with the newly launched London LEZ. The new funds will provide additional short term working capital for the existing retrofit filter business and allow KleenAir to pursue additional opportunities in the Corporate Social Responsibility arena and other potential LEZs in the UK and Europe.
The placing will increase the number of shares outstanding by about 35% but the dilutive effect this has will be offset to some extent by the cash raised. If we assume the costs of the issue amount to approximately 10%, around £1,020,000 will be added to KleenAir’s assets. Immediately prior to the placing KleenAir was trading at 20p per share, giving a market value of £4.14m. If we add the net £1.02m raised, the theoretical price based on the new number of shares should be 18.5p, thus diluting existing shareholders by about 7.5%.
