Beleaguered coatings specialist Micap has been forced into an emergency fundraising to stop it becoming insolvent…
AIM-listed Micap, steered by chief executive officer Michael Norris and whose shares once hit 82.5p, has suspended trading this month ‘pending clarification of its financial position’. The company develops ‘microencapsulation’ technology, a process by which minute particles of liquid or solid material are coated with a uniform and continuous film for a variety of purposes including flavouring for foods. It issued further shares in an urgent bid to secure its financial position through shareholder support.
The news follows a surprisingly upbeat trading statement issued by the company in September, after which Norris chirped that he didn’t understand why the media had focused on the fact that the company was ‘considering various financing options’. It’s a salutary lesson to others on the importance of managing media relations!
Management admitted it hopes to tide itself over by raising more cash through a placing of 59.5 million shares at 1p each. A Micap statement warns that, if it does not receive the required proceeds, ‘there is a material risk the company may not be able to meet its debts as they fall due and that it will become insolvent’. The money will be used to repay an overdraft facility of £100,000 and to settle lease issues for the company’s former head office.