Value plummets

Omega shares crash amid talk of cash call u-turn

Omega Diagnostics
The Scottish company has seen its stock plummet

Omega Diagnostics lost a third of its value after the company confirmed that it may turn to investors for more cash – just days after stating it had no reason to do so.

The Alva-based testing kit supplier said it was in discussions with “certain investors and shareholders” regarding a potential equity fundraising.

In a statement to the stock market, the AIM-quoted firm said: “Market conditions remain challenging and accordingly any issue of equity would be at a discount to the current share price.  Any fundraise would include an open offer to accommodate retail investors.

“As per the announcement of 19 January, the company has significant cash resources . Accordingly, there is no immediate need to raise additional capital and the company may choose not to proceed with a fundraising until such time as conditions are more favourable.”

The company’s shares sank 32% or or 3.4p to 7.25p having traded a year ago above 100p. The collapse followed its failure to secure a contract for Covid testing kits from the UK’s Department of Health and Social Care.

The prospect of a cash call follows the departure earlier this month of chief executive Colin King who was replaced immediately by Jag Grewal, previously head of the company’s health and nutrition division.

On the same day it told investors “there is no short term need to raise additional capital”. 

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