Rakon shares soar after its $14.4 million shot in the arm

Brent Robinson, chief executive of technology firm Rakon in Mt Wellington, Auckland. Photo / Getty Images

Rakon's shares have jumped 33 per cent on the back of its $14.4m deal with Taiwanese investor.

Shares jumped 5.8c in this morning's trading to 23c.

A Taiwanese investor is providing a $14.4 million shot in the arm to Rakon which the Kiwi tech firm's boss says could be a "game-changer".

Siward Crystal Technology's investment will see the Taiwanese-listed company buy 38 million Rakon shares at 37c each - more than twice what the stock is valued at on the NZX.

Rakon shares closed yesterday at 17.2c a piece.

The deal gives Siward a 16.6 per cent stake in Rakon and a spot on the Auckland company's board.

As well as reducing its debt, Rakon managing director Brent Robinson says the new investment would allow both companies to form a strategic partnership.

"Siward's manufacturing scale and expertise is a perfect complement to Rakon's leading-edge technology," Robinson said.

"This partnership will give both companies a broader range of products and alternative channels into new and existing markets," he said.

Siward President Tseng Jung Meng says the company was excited by the "potential opportunities a strategic partnership with Rakon will generate".

"This investment will allow us to explore new opportunities, which we believe will generate significant benefits for Siward over time," Tseng said.

The news comes at the end of a difficult year for Rakon, in which it shares have slumped by 31 per cent.

Investors in September also dumped Rakon executive director Darren Robinson from the board in a rare case of successful shareholder activism.

Rakon last month posted a net loss of $5.7 million in the six months to September.
Revenue slumped 21 per cent to $46m, and underlying earnings before interest, tax, depreciation and amortisation plunged 90 per cent to $647,000.