SRJ Raises A$357k, Acquires UAE Entity to Unlock Energy Contracts
SRJ Technologies clarifies its financial position and strategic rationale behind a recent capital raise and acquisition of a UAE entity, addressing ASX concerns over its viability and voluntary suspension.
- Secured A$250k invoice discounting facility to support working capital
- Raised A$357,000 via placement, partly used to acquire a non-trading UAE entity
- Acquisition aims to unlock UAE energy infrastructure contracts and long-term revenue
- Voluntary suspension justified by confidential negotiations and capital raising needs
- Lead manager Peloton Capital to receive 6% fees on placement and entitlement offer proceeds
Context of Financial Challenges and Capital Raising
SRJ Technologies Group Plc has provided a detailed response to the Australian Securities Exchange (ASX) following queries about its financial health, recent capital raising, and voluntary suspension. The company confirmed it secured an invoice discounting facility of A$250,000 in June 2025, which has contributed positively to its working capital and cash flow management. This facility complements other non-dilutive funding options SRJ continues to explore amid ongoing financial pressures.
Strategic Acquisition of UAE Entity
Central to SRJ’s new growth strategy is the acquisition of First Avenue General Contracting – Sole Proprietorship LLC, a non-trading entity registered with the UAE’s National Oil Company (NOC). Although currently non-revenue generating, this acquisition is positioned as a critical gateway for SRJ to bid on and deliver energy infrastructure contracts in a high-growth Middle Eastern market. The company views this move as foundational to securing recurring, long-term revenue streams and de-risking future contract execution in the region.
Rationale Behind Voluntary Suspension
SRJ’s voluntary suspension request was driven by the need to manage continuous disclosure obligations during confidential negotiations related to the acquisition and capital raising. The company emphasized that without the suspension, it risked undermining its ability to complete the entitlement offer necessary to increase authorised share capital under Jersey law. Despite reporting better-than-expected cash flow metrics; extending funding availability to 5.5 quarters as of June 2025; SRJ maintains it faces genuine financial difficulties that necessitate immediate strategic action.
Use of Placement Proceeds and Fees
The placement raised A$357,000 at a price of A$0.004 per share, with proceeds allocated to complete the UAE acquisition and bolster working capital. Peloton Capital Pty Ltd, acting as lead manager for both the placement and entitlement offer, will receive combined fees totaling 6% of the proceeds. SRJ confirmed full compliance with ASX Listing Rules and continuous disclosure obligations, underscoring its commitment to transparency amid its restructuring efforts.
Looking Ahead
While the acquisition does not immediately generate revenue, it represents a strategic pivot into a promising market segment. The success of this approach will depend on SRJ’s ability to convert the UAE entity’s registration into tangible contracts and sustainable cash flow. Investors will be watching closely to see how the company navigates these early stages of its turnaround and whether further capital injections will be required.
Bottom Line?
SRJ’s strategic acquisition and capital raise mark a pivotal step, but the path to financial stability remains uncertain.
Questions in the middle?
- When will SRJ begin generating revenue from its UAE acquisition?
- What are the specific milestones tied to the entitlement offer and capital raising completion?
- Could further capital raises be necessary if the new strategy takes longer to yield results?
