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ORBITAL Engine Corporation has defied depressed market conditions to proceed with a $6 million two-part capital raising which is fully underwritten by Perth stockbroker Paterson Ord Minnett.
Paterson acted as lead manager for a $2.8 million placement and has also underwritten a $3.2 million capital raising via a share purchase plan. Under the plan, existing shareholders will be able to purchase up to $5,000 of Orbital shares at 12 cents per share, the same price as the placement.
Orbital said the purpose of the capital raising was to “augment its relatively stable cash reserves in order to demonstrate to customers a higher level of financial independence and security”.
In presentations to investors, Orbital said it anticipated a break-even result for the six months to 30 June 2003 and was “systematically working towards profitability” in 2003-04. This follows several years of substantial losses.
The company has seen only modest growth in the take-up of its direct fuel injection technology, resulting in relatively static income.
However managing director Peter Cook, who joined the company early last year, has overseen a stringent cost cutting program, leading to improved earnings.