Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Elektron Technology plc – can the fundraising paper over the cracks?

By Steve Moore

5 July 2014 10:34

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An unsatisfactorily managed "strategic alternatives process" (see HERE) has been brought to an end by Elektron Technology plc (EKT), with the company announcing that it has raised £2.34 million through a placing of 46.8 million new shares at 5p each. It plans to raise up to a further £1.16 million by way of an open offer of up to 23.2 million new shares at the same price. However, with results for the year ended 31st January 2014 showing a loss from continuing operations of £5.3 million, year-end net debt of £8 million and reporting that a shareholder is seeking court permission to make a claim “alleging various breaches of duty by the directors, including dishonesty, 'a reckless acquisition spree', illegal share price manipulation and the implementation of unfair bonus and share schemes without proper shareholder approval”, is the fundraising going to be enough?

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