Omega Diagnostics is taking another crack at raising cash from shareholders as it prepares to sell its HIV testing business and exit Scotland.
The company has announced plans to raise net proceeds of between £1.75 million and £7.25m via a multi-part fundraising priced at 4p per share, with the outcome dependant on overall uptake.
The announcement comes two months after investors failed to rally to a previous open offer priced at 5p per share. Applications were received for just 23.5 per cent of the 40.6 million shares on offer at that time.
Under the current fundraising, Omega has so far raised £2m before expenses through the placing of nearly 50 million shares and 90 million warrants to institutional investors who can subscribe for shares in the future. A further £2m could be forthcoming through the issue of nearly 50 million shares via an open offer to existing shareholders, plus a subscription by directors for a further 2.1 million shares.
READ MORE: Omega investors fail to rally for open offer fundraising
Omega – which suffered from an ill-fated government contract to supply Covid testing kits – has sold its former headquarters in Alva to Accubio, a subsidiary of China’s Zhejiang Orient Gene Biotech, as it withdraws from manufacturing Covid diagnostic kits. Existing staff at Alva are transferring to Accubio as Omega prepares to transfer its remaining operations to Cambridgeshire.
The company is now also looking to sell its CD4 division which makes HIV testing kits, leaving the sole focus on its health and nutrition division. Part of the new money raised will be used to cover the cash costs of running the CD4 business until a buyer is found.
“We have already confirmed that ongoing Covid income is expected to be minimal and, having considered strategic options for CD4 and the funding available to realise that opportunity, we have made the decision to divest the CD4 business and have begun the process of seeking an acquirer for it,” chief executive Jag Grewal said.
“As set out in last month’s trading update, our health and nutrition division contributed to the strong growth seen in the previous financial year. We are very excited about the future prospects that we have in this area and delighted to have secured fresh investment from new shareholders to allow us to deliver on our new focused growth strategy, enabling the company to deliver personalised nutrition to the global market.”
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