Managed services provider Redstone has announced a fundraising valued at close to £2.65m through a conditional placing of 212m new shares in an attempt to improve its financial position and strengthen its growth plans through fibre-optic metropolitan area network (MAN) development.
In a statement to the City today, chairman Ian Smith, who along with chief executive Tony Weaver has subscribed to 31.8m new shares through investment vehicle MXC Capital, said the funds would be used "to support the continued growth of the revitalised business."
"I am encouraged by the strong support shown by all of our significant institutional shareholders and welcome the new institutions that supported the placing. Our pipeline of new business remains strong and the Board remains optimistic for the future prospects of the group," he added.
Following a major restructuring drive at the tail end of 2010, Redstone said it wanted to continue to focus on maintaining delivery of its core offering and strengthening that with new products and expertise to cement its new focus as an end-to-end managed services, technology and infrastructure provider.
In the 12 months to 31 March 2011, Redstone posted positive EBITDA of £1.1m and slashed its operating losses by 19 per cent to £5.3m. Pre-tax losses narrowed by nearly 50 per cent. Sales were close to £70m.