React Group raises £1.25m in oversubscribed placing
Specialist cleaning, hygiene and decontamination company React Group announced a placing of 83,101,597 new ordinary shares on Wednesday, at a price of 1.5p each, to raise £1.25m before expenses.
The AIM-traded firm said the placing was materially oversubscribed, with demand from both new and existing institutional and other investors..
It said it intended to use the net proceeds of around £1.16m to strengthen its sales and marketing activities, support a growing contract pipeline and accelerate organic growth, and provide additional working capital and strengthen its balance sheet to support its aspiration to secure larger contracts.
The placing utilised the company's existing authority to issue new ordinary shares for cash on a non-pre-emptive basis, the board noted.
“React has built a solid foundation on which to develop sustainable growth,” said chief executive officer Shaun Doak.
“Whilst we provide a thorough and rapid response to the demand for deep cleaning and decontamination of property exposed to SARS-CoV-2, the virus that causes Covid-19, we continue to build our core business where the demand for React’s specialist knowhow and skills are equally relevant and over time more sustainable.
“This oversubscribed fundraise recognises the progress achieved so far and provides Ract with the working capital and balance sheet strength to support ambitions for further sustainable and profitable growth.”
At 1602 BST, shares in React Group were up 10.98% at 1.69p.