Orbital in $10m note issue

Engine technology developer Orbital Corporation plans to raise $10 million via a convertible note issue to fund its acquisition of electrical product manufacturer REMSAFE.

It follows Orbital’s announcement in November that it would acquire a 50 per cent stake in the company, which is developing a high-voltage isolation product for bulk-handling mining operations.

REMSAFE, which will relocate to operate with Orbital in Balcatta, is creating the product to improve safety during repairs and stoppages, and increase productivity through reductions in off time.

Orbital said REMSAFE, which had existing contracts with Rio Tinto, BHP Billiton and Fortescue Metals Group at the time of the acquisition, required working capital as it pursued expansion into oil and gas, rail, power distribution and industrial applications.

The note issue will need shareholder approval and will be managed by Azure Capital, which will receive up to 2 million Orbital shares in payment.

Orbital was unchanged at 31 cents per share at the time of writing.