Australian energy storage company Redflow has announced it will raise $18.1 million in equity capital to scale up battery production.
The Brisbane-based company is raising the funds through a combination of a placement to new investors and a fully underwritten rights issue offered to all current shareholders.
Chairman Brett Johnson said the company had made significant progress in the past six months.
“We’ve opened our new wholly-owned manufacturing facility in Thailand which is making quality battery stacks,” he said.
“We now have the ability to manufacture and supply quality batteries in predictable quantities.
“The current plan is to increase our manufacturing capacity in Thailand so we can manufacture as many as 90 complete batteries a month by June 2018 and, subject to demand, scale up production to as many as 250 batteries by December 2018.”
Mr Johnson said Redflow had also appointed a new chief executive officer, Tim Harris, who has extensive international business experience in the telecommunications sector.
“The ability to manufacture quality batteries and Tim’s appointment permits Redflow to invest in the development of a well-articulated growth strategy focusing on the sales, marketing and support infrastructure the company requires to successfully penetrate the international energy storage market,” he said.
“This growth strategy will include the identification of potential sales, marketing and manufacturing joint venture partners.
“We are also focused on continued reduction in the manufacturing cost of the Redflow battery.”
Redflow will invest the additional working capital in this growth strategy as well as manufacturing, raw materials, inventory and cost reduction.
The company is raising a total of $18.1 million before transaction costs, comprising $7.5 million through a placement to new investors and a further $10.6 million through a fully underwritten non-renounceable entitlement offer to all current shareholders.
Mr Johnson said the board had decided to raise most of the new capital through an entitlement offer to permit existing shareholders to participate in this growth phase for Redflow.
“This is a key reason the issue price has been set at the same ten cents per-share as the 2017 placement,” he said.
“The Redflow board fully supports the entitlement offer. Redflow’s largest shareholder and non-executive director Simon Hackett will invest more than $1.8 million to take up his full rights in the entitlement issue.
“Tim Harris will take part in the capital raising by supporting the underwriting of the entitlement offer.
“To date, shareholders have invested in development of the Redflow battery and in the creation of a manufacturing facility.
“We believe we are positioned now to transition from a research and development company into a fully operational manufacturing, sales, marketing and product support organisation.”