Investors in Omega Diagnostics have purchased less than a quarter of 40.6 million shares available through a heavily discounted open offer that preludes the company’s exit from Scotland.

Omega, which has been plagued by an ill-fated government contract to supply Covid diagnostic tests, said last month that it will raise up to £5 million through a placing of 100 million shares with new institutional investors. In a bid to accommodate its existing shareholder base of largely retail investors – who have seen the value of their holdings collapse this past year – Omega said they would also have the chance to purchase shares at an identical discounted share price of 5p each.

Applications were received for just 23.5 per cent of the open shares on offer, taking the total gross proceeds of the combined fundraising to £5.48m versus the upper limit of £7m.

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Omega has sold its headquarters in Alva to Accubio, a wholly-owned subsidiary of Zhejiang Orient Gene Biotech and one of four major suppliers of Covid lateral flow tests to the UK Government. This will pave the way for Omega’s exit from its Clackmannanshire headquarters as it also withdraws from manufacturing Covid test kits.

The company, which has been headquartered in Alva for 19 years, is transferring operations to its purpose-built facilities in Ely, Cambridgeshire. Approximately 109 employees in Alva will transfer over to Accubio.

The fundraising will shore up Omega’s balance sheet as discussions continue with the UK’s Department of Health and Social Care (DHSC), which has demanded the return of £2.5m in pre-payments given to Omega last year to ramp up Covid test manufacturing capacity at Alva. Omega has said that it does not believe it is liable to repay the money.