Rakon boosts bank funding to meet increased telco demand
Rakon boosts bank funding to meet increased telco
By Paul McBeth
Dec. 12 (BusinessDesk) - Rakon has added $6 million to its cash working capital facility with ASB Bank, which it says will help meet the increased demands for telecommunications infrastructure.
The high-tech components maker now has cash facilities of up to $15.5 million, which it said will largely be used on the continuing roll-out of 4/4.5G and 5G mobile telecommunications infrastructure.
Last month Rakon noted that increased demand and its own plans to launch new telecommunications products had contributed to higher net debt of $3.9 million. Telecommunications accounted for about 46 percent of Rakon's first-half revenue.
Rakon's confidence in the telecommunications sector comes from the prevalence of devices needed for 5G mobile infrastructure. The network enables device-to-device communication needed for widespread automation and would need a greater number of small cell sites.
The company got itself into cash surplus at the end of the March 2018 financial year, having spent several years repaying debt taken on to fund an unsuccessful venture in China. It used that position to buy out its Indian joint venture partner this year to gain control of a core part of Rakon's manufacturing strategy.
The shares fell 1 cent to 29 cents, but are still up 26 percent so far this year.