Redstone back from the brink with cash injection

Head honcho Stephen Yapp on the way out as integrator raises almost £10m to secure viability

Sharing the spoils: Redstone hopes to raise £6.5m through the placement of 1.3 billion ordinary shares

Integrator Redstone is attempting to shore up its balance sheet through an £8.5m fundraising initiative as executive chairman Stephen Yapp departs after less than a year in the job.

The firm issued a stock market announcement this morning revealing that it hopes to raise £6.5m through conditional placing of about 1.3 billion ordinary shares at 0.5 pence each. A subscription for 100 million shares will raise a further £0.5m and £1.5m will be added to a convertible loan note, agreed last year.

"The purpose of the fundraising is to strengthen the company's balance sheet, provide working capital and to fund the future development of its business," said Redstone.

Alongside the fundraising, the firm has also restructured its debts and extended its banking facilities. It has also settled a £2.9m chunk of the liability owed to speech recognition firm Eckoh. Redstone bought mobility specialist Symphony Telecom from Eckoh in 2006.

The Oxfordshire-based integrator is to hold a general meeting on 8 September to pass the fundraising resolutions. The firm indicated that it would, in all likelihood, hit the wall without such measures.

Following the general meeting, executive chairman Stephen Yapp is to step down from the board, after less than a year in the job. Recent appointments Ian Smith and Tony Weaver will take on the executive chairman and chief executive roles respectively. The new top brass has also ploughed an extra £1m in funding into their new employer via investment firm MXC Capital.

"We have been delighted by the level of support shown by investors for Redstone, reinforcing the belief Tony and I have in this business and the investment we are making into its future," said Smith.

"This fundraising and refinancing will significantly strengthen the company's balance sheet, giving us a solid foundation to implement our revised strategy. We are confident that we now have the platform in place to capitalise on opportunities in the UK ICT sector and deliver tangible value to shareholders."