SRT Marine Systems, a provider of maritime domain awareness and security systems, has agreed a new investment and financing package from existing shareholder Ocean Infinity (OI), together worth approximately £31 million (approx. US$40 million).
This new financing will allow SRT to satisfy the need for the substantial performance bond required under the terms of a recently announced $213m government contract to deliver an integrated maritime surveillance system.
The cash will also support simultaneous proceeding of three other contracts worth an additional $210m during the next quarter, the company says. All four contracts will have parallel implementation periods over the next two years, with follow on support phases of up to 10 years.
The finance package deal will see SRT issue up to 21.5m new ordinary shares by way of a placing which is entirely underwritten by OI, raising £7.5m. Existing shareholders will be given the right to acquire up to a maximum of 7.5m shares, with OI reserved a minimum of 14m shares.
OI has also provided a $21.4m guarantee to enable SRT to issue a contract performance bond of similar value. The OI guarantee is initially provided as a cash loan of $21.4m with an interest rate of 0.75% per month.
The loan is expected to be repaid by SRT with a period of approximately one month and replaced with a bank guarantee on OI’s behalf. The OI bank guarantee itself will then be replaced within the next 6 months using a combination of SRT’s own resources and the UKEF export guarantee programme.
In return for providing this guarantee, OI is being granted warrants with an exercise period of three years that will inject a further £7m equity for SRT when exercised.
“This financing package enables SRT to make a truly transformational commercial leap and very significantly accelerate the financial performance of the company through the simultaneous delivery of over $400m of contracts and with capacity for more,” said Simon Tucker, CEO of SRT Marine System.
“Besides the obvious product and technology synergies between OI and SRT in the MDA (maritime domain awareness) space, we are fortunate to have this level of support which enables us to confidently deliver on these contracts whilst also taking full advantage of our growing pipeline of future opportunities which we expect to continue to grow, and deliver a flow of more new contracts.”
