PRW
Published: September 12, 2014 10:50 am ET
Updated: September 12, 2014 10:54 am ET
Image By: Zotefoams plc
Zotefoams plc's Walton, Ky., plant.
otefoams plc, a British maker of specialty foams, has placed nearly 4 million shares on the market order to raise 8.4 million pounds ($13.6 million) to help fund investment in its plant in the U.S.
The investment in Walton, Ky., would total $22 million, the Croydon, England-based company said, with the balance being funded via debt, operational cash flow and what it called “local government incentives.”
Explaining its decision to invest in the U.S. rather than its U.K. operation Zotefoams said: “Having carefully considered the two location options, the board has decided to invest in [our] existing wholly-owned U.S. manufacturing site in Walton.
“The investment will comprise high-pressure gassing capacity along with supporting extrusion capacity and related infrastructure, making the Walton site self-standing for most products sold into the North American market.”
The Walton site currently runs only the final expansion part of Zotefoams’ three-stage manufacturing process with intermediate material shipped from Croydon.
Zotefoams said certain small volume polyolefin products, “those with unique raw material formulations and HPP products,” would continue to be manufactured at Croydon “for the time being.”
It went on: "The investment will also provide Zotefoams with the ability and flexibility to pursue future investment opportunities, including in its fast-growing HPP business, in either the U.K. or U.S., with further investment at either site cost effective and determinable by geographical need for capacity.
The group said the placing, at an issue price of 220 pence ($3.57), would raise 8.8 million pounds ($14.2 million) before expenses and represented just shy of 10 percent of its existing issued share capital. It would be earnings dilutive before the realization of the investment's returns, Zotefoams added.
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