Embattled Faritec has signed agreements with shareholders, management and creditors to raise R55 million.
Faritec said late last year that it wanted to raise R60 million to implement a turnaround plan, ensure sufficient cash for operations, and pay creditors.
CEO Fanie van Rensburg says the company has now secured agreements to fund R55 million of this, and hopes to ultimately raise R80 million.
Majority shareholder Shoden Data Systems and some members of the management team have committed to underwriting R30 million of a R60 million rights offer. This will see shares being issued with the aim of allowing current shareholders to increase their stake in return for funding.
Van Rensburg says he is committed to the company and believes it is a “fantastic opportunity”. He has committed R5 million of his own capital to the fund-raising exercise.
In addition, another R25 million will be raised by converting what the company owes to creditors into shares in Faritec. Van Rensburg hopes more creditors will convert what they are owed, and this will take the ultimate amount raised to R80 million.
“If we can get to that, then we've got all the problems solved and the balance sheet is in order,” he says.
Faritec will now finalise the agreements with creditors, and the rights issue is expected to be completed within 12 weeks if all the terms and conditions are met.
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