Zoltek Companies Inc. (Nasdaq: ZOLT), which makes components used for wind turbines and other products, has entered into an agreement for a convertible debenture financing package of up to $50 million in a private placement with a group of institutional investors.
Zoltek will use the proceeds to support expansion, including the construction and start-up of nine new carbon fiber production lines at facilities in Hungary and the addition of new capacity at that plant for making acrylic precursor raw material used in the production of carbon fiber. “The new financing package is key to meeting rapidly expanding demand for carbon fibers, to increasing Zoltek’s sales and operating results in the near-term future, and to achieving our strategic objective of commercializing carbon fiber as competitive cost, high volume building material,” said Zsolt Rumy, Zoltek’s Chairman and CEO. “The financing package will enable us to almost double our capacity from what it will be at the end of this year — lifting rated carbon fiber productive capacity from 9 million to 17 million pounds a year. This is not a matter of build it (additional capacity) and they will come. All of new capacity that we are bringing on line will be used to satisfy contractual commitments to customers in 2006 and 2007.”
“We think that in the current environment this is the best, least dilutive and most expedient financing we can get,” Rumy said.
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