LONDON --Cyan (LSE: CYAN.L) slumped 18% to 0.385 pence this morning after announcing plans to raise 2.1 million pounds from a share placing. The system and software company revealed it would issue nearly 603 million extra shares at 0.35 pence -- a 26% discount to yesterday's 0.47 pence.
Cyan confirmed that the placing's proceeds would be used to help establish the firm's position within the Indian "smart metering" market and, in particular, win a contract with the Tamil Nadu Electricity Board.
Cyan's technology has already been integrated into five utility meter manufacturers in India and, earlier this year, the group received an order exceeding $1 million to fulfill the initial stages of a number of projects.
Executive chairman John Cronin urged shareholders to approve the proposed share placing in order to "safeguard their investment." He also believes Cyan "remains in an outstanding position to secure substantial revenues from a very large market."
Such optimism could make today's share-price fall a buying opportunity. Although Cyan's 6 million pound market cap and checkered history have left this share well under the City's radar, long-term success in India could spur an enormous recovery.
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