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K3 looks for funds to support resources review

A share offer and a public placing should raise millions to help K3 at a time when the firm is undergoing a business review

K3 has made it clear that it is looking for additional finance to help fund future growth and give it some breathing space during a strategic review.

The ERP software services specialist has already warned that it is not going to meet full year targets and recently started a review of its resources.

The firm is planning to raise £7.5m through a share placement and a further £1m through an open offer. That cash is going to provide working capital for the K3 Group as it goes through its review.

"As we have reported previously, we are now engaged in a review of the Group's resources. The objective of this review is to refocus K3's growth strategy around its cash generating business units and the Group's large SME customer base," said Adalsteinn Valdimarsson, CEO of K3.

"This proposed placing and open offer to qualifying shareholders will strengthen the Group's balance sheet and provide additional working capital during this review and enables us to operate with full flexibility as we make strategic decisions," he added.

He said that he expected the "strategic steps" that it was currently taking would create a solid platform for future growth.

"We remain encouraged by the underlying strength and performance of K3's profitable business units which generate significant recurring revenues and cash flows from our large SME customer base. We are also pleased with the pilot project underway for our new cloud-based modular technologies, which we expect to generate opportunities with both new and existing customers," he said.

At the same time as revealing the finance raising plans that firm has also shared the decision of its chairman David Bolton to retire. Non-executive director Stuart Darling will take on the role on an interim basis while the firm starts a recruitment process.

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