Plastics Capital raises £3.7m in placing

Niche plastics products group Plastics Capital announced a conditional placing to raise approximately £3.74m before expenses on Friday, by way of a placing of 3,194,445 new ordinary shares at 117p per placing share.

The AIM-traded firm said the net proceeds of the placing, which were expected to amount to approximately £3.54m, would be applied - in part - towards the proposed increase of the company's stake in the CCM Group, its US based minority investment focused on the production of creasing matrix.

In addition, part of the net placing proceeds would be invested in other parts of the group in order to increase capacity, to satisfy increasing demand for the group's products and thereby accelerate organic growth.

Application would be made for the placing shares to be admitted to trading on AIM at 0800 BST on 31 May.

Following admission of the placing shares, the total number of voting rights in the company would be 38,945,151.

The net proceeds of the placing would be augmented by the decision of the board to suspend dividend payments for at least the next two scheduled payments, the board said.

Plastics Capital said it estimated that would result in a cash saving of approximately £1.7m.

It intended for the cash saving to be re-invested in the business, alongside certain of the net proceeds of the placing.

After 12 months, the directors said they would reconsider the payment of dividends within the overall context of capital allocation decisions then facing the company.

“We are very pleased to announce an oversubscribed £3.74m placing with institutional shareholders, at a small discount to the prevailing market price, which when added to the cash saving from the suspension of dividend payments, will be applied towards the proposed increase of our stake in the CCM Group and increasing investment in a number of growth areas including capacity in our mandrels, bearings and films businesses.”