ITM Power has announced its intention to raise £29.4m via a firm placing and open offer to support the delivery of its contract backlog and opportunity pipeline.

The UK-based company said it plans to raise £25m (before expenses) through a placing of 62.5m New Ordinary Shares at a price of 40p per share with certain existing and new institutional investors. ITM Power also want to raise up to £4.4m through an open offer of 10.9m New Ordinary Shares.

The net proceeds of the firm placing and open offer will be used by the company to provide working capital to support the delivery of the contract backlog and opportunity pipeline; to move to new larger facilities which will consolidate the group’s two current sites and is expected to facilitate annual production capacity of around 300MW. In addition, the company would seek the installation of an enlarged grid connection of up to 5MW, in order to be able to test larger scale electrolysers; strengthen the Group’s balance sheet, to assist in meeting tender requirements, in particular with regard to obtaining improved upfront payment terms from customers and suppliers; and move toward achieving positive cash flow and profitability within the medium term.

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Dr Graham Cooley (left), CEO of ITM Power, said, “We are delighted to disclose our c.£180m opportunity pipeline of highly qualified tenders, which sits behind our growing backlog of contracted orders. This demonstrates significant traction for ITM Power’s products and the growing momentum in the hydrogen energy market overall.”

“The £25m placing and up to around £4.4m open offer considerably strengthens our balance sheet and should provide enhanced confidence to our customers on ITM Power’s ability to deliver future orders at increased scale. It should also enable us to unlock further efficiencies in our supply chain.”

“We look forward to updating the market as opportunities are converted from pipeline to contracted sales, as we near our target of positive cashflow generation.”

ITM Power completes £29.4m working capital fundraise