Redflow announces capital raising following strategic review
Australian battery company Redflow has announced a $14.5 million capital raising to meet the rising demand for batteries.
The capital raising follows the company’s May announcement of decisions made from a strategic review including: prioritising sales to supply proven-demand areas; transitioning battery production to South-East Asia; implementing a range of key battery cost-down projects to reduce delivered product manufacturing cost by at least 30% over the next 18 months; and targeting sustainable, cashflow-positive operations by the end of 2018.
The equity raising comprises a share placement of $10.5 million in two tranches to sophisticated and professional investors and the issue of $4 million worth of shares to Hackett CP Nominees — an entity associated with Redflow Executive Chairman Simon Hackett — in exchange for already issued convertible notes.
Hackett said the strategic review had determined the best forward operating stance for the company. “We have identified that the telecommunications sector has a strong, proven and ongoing demand for energy storage that fits the ‘sweet spot’ of Redflow’s unique value proposition. In May Redflow recorded its largest sale to date, to an energy systems integrator working in the telecommunications and network power sector.
“At the same time, Redflow will continue supplying into its ZCell residential battery sales channel which is delivering our compelling energy storage solution for residential and SOHO customers, especially those located in off-grid areas or warm climates.”
Redflow Chief Operating Officer Richard Aird said the process of disengaging from the company’s former manufacturing location was substantially complete. “The activities Redflow is undertaking to transition manufacturing and to implement key product cost-down projects are critical to the future success of the company,” he said.
“Product deliveries will continue from built-up stock on hand and stock in transit ahead of the planned resumption of manufacturing in South-East Asia toward the end of this calendar year. Redflow staff are keen and committed to achieving the steps needed to maximise our prospects of future success.”
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