In a bad sign for the renewable energy market, Perth-based solar power specialist Solco has withdrawn a $4 million rights issue offered last month due to price instability in the solar market.
Solco announced the capital raising in November, offering a two-for-seven rights issue at 7 cents per share.
The company said today the withdrawal follows a significant and further deterioration in the solar market since the offer was lodged.
The company board resolved to withdraw the offer until Solco could demonstrate to its shareholders the benefits of making additional investment in the company.
Solco said it is currently arranging for refunds to be made to parties who had taken up their entitlements.
In October the company announced expected revenues for the 2012 financial year would be around $40 million, however the company announced today a weak second quarter combined with the volatility of panel prices had made it “difficult to provide an accurate update to shareholders”.
Solco said it intends to provide further guidance based on half year results in the New Year.
The company said the board remains confident that Solco is well-placed to see through the downturn, and that the upside of falling panel prices was the rapid bringing forward of price parity between residential and commercial customers.
Solco shares were up 0.2 cents to 7 cents are 11.05am WST.