SHAREHOLDERS who yesterday stamped their approval on an institutional placing to raise #1m in working capital for Magnum Power would have been at least somewhat cheered by the additional news that the Livingston-based company has signed the second-largest supply contract in its history.
Magnum, which makes built-in uninterruptible power supplies (BI-UPS), said it will begin delivering these devices to Germany's Siemens Nixdorf in November. The total contract covers two years and is expected to be worth around #900,000.
Siemens Nixdorf will use Magnum's BI-UPS, which save computer files in the event of a sudden power loss, in the next version of its Beetle series EPOS system. EPOS, or electronic point of sale, is a computerised till system used by a large and growing proportion of companies and shops.
The announcement was made in conjunction with news that Magnum shareholders had agreed to increase the company's authorised share capital to #10.5m by the creation of an additional five million new Ordinary shares.
This paved the way for completion of an institutional placing of 10.2 million shares at 12p each, thus generating #1m for the small AIM-listed company.
Magnum has also offered up to 21.2 million new shares at the same price to existing investors, on the basis of one new share for every three held.
Company stockbroker Henry Cooke Lumsden has underwritten 3.1 million of the rights shares, while existing institutional investors have promised to take up their entitlements to 5.9 million new shares.
Private shareholders and other institutional investors have until May 28 to decide whether or not to take up their rights options.
The underwriting agreement guarantees Magnum will raise a total of at least #2.1m, although that figure could reach roughly #3.5m if all shareholders take up their rights.
The company will use the cash to help finance operations until revenues from nascent licensing agreements begin to flow through.
Trading in all new shares is expected to begin today.
The value of Magnum's stock finished half-a-penny higher yesterday at 20p per share.
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