Modern Water plc has announced today that it has raised, subject to certain conditions, £10.0 million via a placing of 20,000,000 new Ordinary Shares with both new and existing institutional shareholders at a price of 50 pence per Ordinary Share.

The Placing Shares will represent 25.2 per cent. of the Company’s enlarged issued ordinary share capital immediately following completion of the Placing.

The net proceeds of the issue of the Placing Shares are expected to be approximately £9.5 million and will enable the Company to pursue opportunities identified by its membrane division to commercialise its Forward Osmosis technology, particularly across China and the Middle East. Modern Water also wants to grow its monitoring business by licensing and acquiring innovative, proven products to leverage its international distribution network.

A general meeting of Modern Water to approve the Placing will be held on 28 February 2013.

Neil McDougall, Executive Chairman of Modern Water said:

“We are delighted by the strong support, demonstrated by both existing and new shareholders, for the fundraising announced today which was oversubscribed. This is a great vote of confidence in Modern Water. The funds raised will enable us to increase the level and reach of market activities and invest in our growth strategy in key markets, with a particular focus on activities in China. We intend to invest in further improvements in membrane efficiency for the Membrane Processes Division and to expand the Monitoring Division through acquisitions.”

The Company’s membrane division uses Modern Water’s patented Forward Osmosis technology platform which has a range of commercial applications. This process has successfully completed technical development and proving phases and is now in the stage of full commercial development with several projects and trade agreements achieved.

Following the successful production of water at a proving plant in Gibraltar in 2008, the following year saw Modern Water produce water at a pilot plant in Oman. In 2011, Modern Water was awarded the world’s first commercial contract for the development of a Forward Osmosis desalination plant at a second location in Oman which was commissioned during 2012.

Desalination market a key opportunity

Modern Water sees the global desalination market as a key opportunity – demand is estimated to grow from under six million cubic metres in 2010 to over 10 million cubic metres by 2016. Currently, the company’s key markets are in the Middle East and China.

In terms of future business strateg, tModern Water said that during 2013, the Directors intend that the company will concentrate on a number of key areas, including:

• scale up the level and reach of market activities in both its membrane and monitoring divisions;
• develop projects with Hangzhou Water – Modern Water has identified a number of potential projects and hope to announce the first project within six months;
• enter the industrial water market in China, with a potential partner;
• build on existing relationships in the Middle East to secure further projects;
• progress further with projects identified with its partner Kazema in Kuwait and other countries in the region; and
• further accelerate growth in the Monitoring division through strategic partnerships and targeted acquisitions and to grow by licensing and acquiring innovative, proven products to leverage through its global distribution network.