SECURITY and surveillance systems developer Petards' bid to raise cash by issuing shares is being jeopardised by one of its major shareholders.
The Gateshead business, which recently won an £8m order for its eyeTrain on-board digital CCTV systems, has called a general meeting for next Thursday when it will propose a resolution to give the board authority to issue shares.
But London-based holding company Water Hall Group, which owns 29.9% of Petards, has written to shareholders to say it will be voting against the proposal.
Petards said: “Although Water Hall say their response is in the interests of all the Petards shareholders, it is the opinion of Petards’ independent directors that Water Hall is actually pursuing its own agenda.
“The company has wished to raise capital for some time to fund the development of its business and the Petards independent directors are concerned that since increasing its shareholding in Petards to 29.9% in 2010, Water Hall has voted against all resolutions put to shareholders relating to the raising of capital.”
Petards finance director Andy Wonnacott said he was hopeful the company would win support from its other shareholders.
He said: “We had our general meeting and we put forward a resolution for issuing shares and Water Hall were the only shareholders that voted against it.
“We want to be in a position to issue shares but Water Hall are still not happy with our proposals so we are having another meeting next Thursday.
“All shareholders have different agendas. Obviously we’ve tried to determine what the particular issue is but we have not been successful in coming up with something they are happy with.
“What we’re putting forward is seeking authority that if the board wants to raise money, it has the authority to do so.”
Despite big defence spending cuts by the Government, the company has been growing strongly in the last couple of years and in June said that its profits had quadrupled last year from £53,000 to £215,000 on revenues up 6% to £12.1m.
Water Hall Group sold its waste management subsidiary earlier this year and is now exclusively an investing company which, like Petards, is listed on the Alternative Investment Market.
As well as its holding in Petards, Water Hall owns 800,000 ordinary shares in Lloyds Banking Group.
Water Hall’s website says the company is primarily interested in investing in initially UK businesses with “an element of technological expertise” that can be developed worldwide.
The company has not replied to requests to comment on its position regarding Petards.