Atlas Development & Support Services (ADSS) is set to raise $5 million (Sh505 million) by selling new shares to investors.
The company, which is dual listed on the London Stock Exchange and Nairobi Securities Exchange, says it will use the money to conduct a feasibility study for a glass manufacturing plant in Ethiopia.
“The board today announces its intention to raise approximately $5 million through an issue of new ordinary shares by way of a placing at a price of 0.325 pence (Sh0.48) per ordinary share,” the company said in a statement.
“The proceeds of the placing will be used to fund a full feasibility study for the company’s Chancho project in Ethiopia … as well as initial construction works.”
The proposal to raise funds is to be tabled before a shareholders’ meeting slated for March 10 in Guernsey, an island that forms part of the British overseas territories.
ADSS has also proposed to change its name to Atlas African Industries Limited to reflect its shift to manufacturing after a meltdown of its logistics services model.
The glass plant will be one of its first operating units after the company closed its Kenyan subsidiaries that are now set for liquidation.
The closure of its Kenyan support services subsidiaries Ardan Logistics, Ardan Medical Services and Ardan Civil Engineering led to the retrenchment of some 750 employees.
ADSS took the drastic action following the downturn in the oil prospecting sector, on which it relied, offering services to exploration firms like Tullow Oil.
The company’s net losses widened to $9.6 million (Sh970 million) in the year ended June 2015 compared to $5.8 million (Sh585 million) a year earlier, as operating expenses grew faster than revenues.
Its share price has lost 86 per cent over the past one year to the current Sh1.7.