One of Wales’ leading tech companies IQE has raised £30m minus expenses after issuing new shares in a fundraise. IQE, which is headquartered in Cardiff and is a world leading supplier of compound semiconductor wafer products, said a total of 150 million new ordinary shares had been placed at a price of 20 pence a share, raising gross proceeds of £30m.
The issue price represents a discount of approximately 14.9% to the closing price of 23.5 pence for each existing ordinary share on Wednesday. The firm revealed its intention to fundraise from the London Stock Exchange on Wednesday morning and today confirmed it had reached its target.
However, IQE’s shares were down 14% at 20.10 pence following the results of the placing, as the firm also looks to raise up to £3m via a retail offer. The company said the total fundraise is to ensure that it can continue to invest to execute on its strategy, meet its near-term liquidity requirements and deliver a sustainable balance sheet going forward.
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It has also entered into an agreement with its lending bank, HSBC, to extend the term of its $35m revolving credit facility to May 2026, conditional on the completion of the placing. This, it said, was to ensure “sufficient headroom” in the event that the macroeconomic headwinds persist through H2 2023.
In unaudited preliminary results to the year end 31 December 2022 released yesterday alongside the fundraise, group revenue for FY 2022 was up 9% at £167.5m (2021: £154.1m).
Reported operating loss was at £73m (up from £20m in 2021) primarily due to the non-cash impairment of goodwill of £62.7m, with an adjusted operating loss of £3.6m (2021: £6.5m).
On its company outlook, the firm said current trading is affected by the temporary semiconductor industry downturn, with reduced customer forecasts, orders and associated revenue.
IQE chief executive Americo Lemos said: "IQE delivered a solid full year performance and improved margins in 2022 despite a challenging industry backdrop. Our strategic and long-term customer engagement model was validated by the announcement of several key partnership agreements during the year, and has resulted in a healthy new business pipeline.
“We remain confident in the strategy we announced at our Capital Markets Day and are focused on diversifying into high-growth markets such as power electronics and microLED displays. The fundraising we have announced today will enable us to continue to invest in GaN technologies for these applications, while providing us with the fiscal headroom to navigate the current cyclical downturn."
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