Mike Pivac-led FBR has announced plans to reduce its annual costs by around 70 per cent, in order meet its present requirements.
Shares in robotic construction tech company FBR were sold off on Thursday, following news that the company plans to reduce its annual costs by approximately 70 per cent.
Additionally, High Wycombe-based FBR told the market it was tapping investors for $6.3 million, courtesy of a two-tranche placement, in a bid to generate additional working capital, development and restructuring costs.
FBR shares closed trade down 41 per cent to 1 cent, marking their lowest price since March 31 2015.
“The workforce of FBR will be right sized to match the current needs of the business,” the company said.
“This restructuring exercise will cost approximately $2.3 million and will result in a more sustainable cost base to reflect the company’s immediate goals.
“This program has seen the board, including founders Mike Pivac and Mark Pivac, agreeing to accept a thirty per cent reduction in salaries and fees.
“Additionally, the number of non-executive directors will be reduced by twenty-five per cent.
“Through these measures, FBR will reduce its ongoing costs by about seventy per cent, while retaining a core technical team to operate and maintain Hadrian X units, complete commissioning of an additional Hadrian X unit and continue FBR’s research and development projects with external parties such as Samsung Heavy Industries.”
It is unclear how many jobs in total will be affected by the headcount process. The company will also consolidate its headquarters in Western Australia, which will be its head office.
"The company is currently undertaking a review to assess the exact reduction in staff numbers, with the goal being to ensure the company is adequately staffed to execute on the commercial opportunities that lay ahead of us," an FBR spokesperson said.
"While exact numbers are not finalised, we expect headcount reduction to be in vicinity of 70 per cent."
On February 17, FBR announced it was unable to sign a joint venture deal with CRH Ventures, prior to the conclusion of its 45-day option period.
Unfortunately for the junior, this was another partnership or agreement that ultimately came to naught, despite clear promise displayed by the Hadrian X unit throughout its US demonstration program.
Following this announcement, Mike Pivac said he felt the company’s opportunities to succeed in the US remained alive despite the setback.
A couple of weeks later, FBR said it was contemplating a potential move into the shipbuilding industry, on the back of a positive technology demonstration to South Korea-based Samsung Heavy Industries.
Throughout the investment into its technology, FBR has undertaken more than 10 capital raisings in the past decade.
Its latest raise involves issuing around 628.3 million shares at an issue price of 1 cent per share, which represents a 41.2 per cent discount to FBR’s final closing price on March 24.
Bell Potter Securities were appointed bookrunner and lead manager to the placement.
