XP Power Ltd on Monday announced a placing of up to £43.9 million and a retail offer of up to £1.5 million.

In total, the designer and manufacturer of power controllers plans to raise up to £45.4 million.

The shares are priced at 1,150 pence per share, representing a 6.1% premium to the closing price on Friday.

Shares in XP closed down 4.8% to 1,032.00p each in London on Monday. In the last 12 months, the stock is down 46%.

The company said the fundraise will be used to reduce net debt, improve the company’s liquidity position, refinance capital investments and continue to invest in key areas including research & development.

In October, XP said that trading in the third quarter was below management’s expectations, with economic uncertainty and weaker end-market demand in the semiconductor manufacturing equipment sector resulting in some customers deferring shipments into 2024.

Later in October, it said it was in ‘advanced and constructive discussions’ with its lending banks concerning ‘future covenant requirements and other near-term actions to strengthen the balance sheet’.

‘XP Power’s strategy, market positioning, customer proposition and medium term demand outlook all remain strong. In response to the downturn in short term market conditions we have taken decisive management action to reduce costs and conserve cash, and agreed a new covenant package with our lenders,’ said Chief Executive Gavin Griggs.

‘Proceeds from the fundraise will build on this action, reducing net debt and improving liquidity and covenant headroom, and enabling us to continue to invest in the areas that will be key to our future growth, including research and development and the expansion of our operating capacity.’

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