Environmental science and technology company Accsys Technologies (AIM: AXS) has proposed an equity issue to raise €17 million for working capital purposes and to support the Accoya wood production at its plant in Arnhem.
A total 34.7 million shares will be issued to institutional investors as well as directors and senior managers of the company at a price of €0.4865, representing a slight discount from the stock’s yesterday’s closing price of €0.5.
The new shares account for 21.6% of the enlarged issued capital of the company.
The net proceeds will be used for purposes including supporting production and sales of Accoya wood out of the plant in Arnhem, advancing the production of panel products using the company's proprietary technology to a commercial scale and providing working capital to meet short and medium term requirements.
Accsys said that the demand at the Arnhem facility reached its highest level to date in October and November as levels of interest from potential licensees also have increased.
“The strengthening of our financial position through this fundraising is a significant step. We have made great strides over the past few months in expanding our global network of distributors, building the Accoya wood brand and raising awareness within the industry that our product has the high performance of a hard wood whilst being fully sustainable.We strongly believe that this will fuel greater licensing opportunities,” said Chief Executive of Accsys Paul Clegg.
Accsys has developed a process to treat sustainable softwoods to give them properties demanded by end users of more expensive woods including hardwoods, earning its revenues through the production of its proprietary Accoya wood at its plant in Arnhem in the Netherlands and technology licensing via Titan Wood.
Total sales of Accoya wood for the six months to 30 September 2009 were up 17%on the same period last year, and have increased significantly since the period end.
The company now has 12 distribution agreements and 2 agency agreements in place, the latest one being the distribution agreement signed with Universal Forest Products Inc (Nasdaq: UFPI) for North America which was announced in mid-October.
Accsys has also made progress with its panel business. Following the signing of the joint development agreement with Medite Europe Ltd in June, the first 20 cubic metres of medium density fibreboard, incorporating Tricoya wood elements, was produced on September 30.