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KleenAir Systems (KSI.L) - a trading statement – of sorts
KSI.L
Comment by Objective Capital , Feb 21, 2008
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The trading update contained little in the way of news or surprises. In particular it included no financial performance indicators. It described its perception of general market conditions, the results of a successful share placing, a minority investment and the appointment of a Non-Exec Director.
Objective's view:
The delay in mandated NOx emission reduction for heavy goods vehicles until 2012 has been known for some time, and KSI’s decision to concentrate for the time being on the opportunities presented by the introduction of the London LEZ was covered extensively in our recent initiation note (published 15 January 2008).
The placing of 7,094,400 new shares at 15.75p per share has been successfully completed and raises £1,117,368 before expenses and will provide a welcome boost to working capital. The placing was conducted by Charles Street Securities (CSS).
KSI has agreed to invest £300,000 for a 3.85% stake in NoNox plc. KSI believes this to be a complementary business as it provides filters for stationary boilers and generators in Italy. KSI discloses that a reverse take-over of NoNox was considered but will not proceed, although the companies are still discussing co-operation in several areas. We note that NoNox is unquoted with no publicly available financial data. It is hard to assess the value represented by KSI’s small minority stake having just raised much needed working capital.
We note also that the Non-Exec Director, Robert Hayim, is an MD at CSS Capital Partners LLP, an affiliate of Charles Street Securities which, according to its website, records a £1.5m fund raise for NoNox as a “Transaction in Progress” dated January 2006.
