Issue of Equity

RNS Number : 8919U

Strat Aero PLC

24 January 2017

 

Strat Aero plc / Index: AIM / TIDM: AERO / Sector: Support Services

24 January 2017

Strat Aero plc ("Strat Aero", the "Company" or the "Group")

Issue of Equity

Strat Aero plc, an international aerospace company focused on the rapidly emerging Unmanned Aerial Vehicle ("UAV") sector, is pleased to announce that it has successfully raised £380,000 (before expenses) by way of a placing ("the Placing") of 380,000,000 new ordinary shares of 0.1p each ("Ordinary Shares") ("Placing Shares") at a price of 0.1p per ordinary share ("Placing Price").    In addition, 418,000,000 warrants with a two-year expiry and an exercise price of 0.225p have also been granted in conjunction with the Placing.  The funds raised will be used for general working capital purposes.

Iain McLure, CEO of Strat Aero plc, said "The funds raised today will strengthen our working capital position at a time when tangible progress is being made at our two core divisions: Survey & Inspection Services and Commercial UAS Training & Education.  Our wholly-owned surveying business, Geocurve, continues to win new profitable business in tandem with fulfilling existing contracts with its blue-chip customer base, including the delivery of specialised professional surveys over the Thames Estuary on behalf of the Environment Agency.  Meanwhile in line with our strategy to position Strat Aero as the go-to provider of UAV training services and qualifications, our Asian partners have commenced the roll-out of our franchise based training solutions to train UAV operators in key markets and we have successfully launched our first UK based training course.   

"We are focused on growing profitably which, combined with the strict management of our cost base, will bring forward the point when further expansion can be funded by the reinvestment of internally generated cash flows."

Use of Funds

Strat Aero, by focusing on its two core divisions, continues to develop revenue growth opportunities whilst pursuing a vigorous cost reduction programme. Reducing the Company's cash burn run rate remains a top priority within the Group with the goal ultimately that Strat Aero will become cash generative by the end of the financial year ending 31 December 2017.  The Funds raised via this placing will be used to support the continued working capital requirements of the business while the Company work towards this goal.

The Company is currently renegotiating the Farina credit facility (details of which were announced on 24 November 2016) which is currently due to expire in May 2017 with the expectation that the term of the facility will be extended on favourable terms.  Further announcements in respect of the Farina facility will be made in due course as appropriate.

Details of the Placing

Application will be made for the 380,000,000 the Placing shares, which will rank pari passu with the existing Ordinary Shares in the Company, to be admitted to trading on AIM ('Admission').  It is expected that Admission will become effective and dealings will commence at 7:00 a.m. on or around 31 January 2017. 

Share Capital and Total Voting Rights

Following the issue of the Placing Shares, the issued share capital of the Company will consist of 764,285,280 Ordinary Shares.  No shares were held in treasury at the date of this announcement.  The total current voting rights in the Company are therefore 764,285,280.

The total current voting rights number of 764,285,280 Ordinary Shares is the figure which may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the Company.

Warrants

418,000,000 warrants with a two-year expiry and an exercise price of 0.225p have also been granted in conjunction with the Placing.  These warrants will be issued following appropriate shareholder approval for increased capital issuance.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

- ENDS -

For further information please visit www.strat-aero.com or contact:

Strat Aero plc	Tel: [phone]
Graham Peck (Chairman)
SP Angel Corporate Finance LLP	Tel: [phone]
Nominated Adviser and Joint Broker
Stuart Gledhill Jeff Keating
Beaufort Securities Limited	Tel: [phone]
Joint Broker
Elliot Hance
Cornhill Capital Ltd
Joint Broker
Colin Rowbury	Tel: [phone]
St Brides Partners Ltd	Tel: [phone]
Financial PR Frank Buhagiar Susie Geliher

Notes

Strat Aero plc is a multi-divisional international aerospace services company, focussed primarily on the provision of complete client solutions in the Unmanned Aerial System ('UAS' market), which is predicted to show exponential growth over the coming decade.  Commercial and military applications in UASs are expected to be a dynamic growth sector in the aerospace industry over the next 10 years with the UAS market forecast to grow to more than US$82.1 billion between 2015 and 2025 (AUVSI Economic Report 2013) and the global airborne Intelligence, Surveillance and Reconnaissance ('ISR') market estimated to grow to US$19.23 billion by 2023. 

 

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