$63m share issue to fund development into 2018
Thin Film Electronics (Thinfilm) has announced a private placement to raise NOK529m ($62.6m) at an issue price of NOK3.91 per share. The funds are to be used to prepare and equip the new roll-to-roll facility in San Jose as well as to cover operating costs in 2017 and 2018. Based on revised model assumptions, we estimate they should be sufficient to bridge all but $21m of Thinfilm’s future cash requirements ahead of it becoming free cash flow generative in 2019. As such, we expect this issue to greatly reduce investor concerns about future funding needs and potential further equity dilution. Adjusting for the increase in the number of shares, we have revised our DCF valuation by 5% from $10.40 to $9.70 per ADR.Thin Film Electronics is an electronics group based in Norway. Co. is engaged in the development of printed electronics. Co. commercializes printed rewritable memory and creates printed system products that include memory, sensing, display and wireless communication. Co.'s products include memory labels, storing digital data on a thin, rewritable label; brand protection solutions, consisting of adhesive labels that generate a distinct forensic electrical signature; sensor labels, which sense information and store data; display labels, low cost display media to communicate the information stored in the ThinFilm Memory; and NFC Smart Labels.
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