Omega confirms it may sell shares to raise £7m

Shares of Alva-based Omega Diagnostics Group fell another 25% on Thursday after it confirmed speculation that it has conditional investor support for an equity fundraising at 5p per share and that it is considering an undertaking to sell shares in a placing to raise £5 million “with an accompanying open offer to raise up to a further £2m.”

However, Omega added that any such fundraising would be conditional “upon certain other corporate actions currently being explored by the group” and accordingly there “is no certainty at this time that any such fundraise will proceed.”

The news follows the announcement on January 19 that CEO Colin King would step down with immediate effect and that former chairman Bill Rhodes will step down at the end of February 2022.

Jag Grewal, former managing director of the health and nutrition division, was appointed CEO.

On December 10, Omega shares fell about 30% after it published a stock exchange statement about a legal fight with the UK Government’s Department of Health and Social Care (DHSC) over a £2.5 million repayment being demanded by the DHSC related to a contract for COVID-19 lateral flow antigen tests.

Omega shares have fallen about 90% over the past 12 months.

The shares were trading around £1 a year ago but have since fallen to about 7p and the firm’s stock market value has slumped to around £13 million.

In a stock exchange statement, the Alva company said: “Omega (AIM: ODX), the specialist medical diagnostics company focused on industry-leading Global Health (CD4 and COVID-19) and Health and Nutrition products, notes today’s online speculation and confirms that it has conditional investor support for an equity fundraising at 5p per share and that it is considering undertaking a share placing to raise approximately £5m with an accompanying open offer to raise up to a further £2m.

Any such fundraising would however be conditional upon certain other corporate actions currently being explored by the group and, accordingly, there is no certainty at this time that any such fundraise will proceed.

A further announcement will be made in due course as necessary.”

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