Photonics firm Enablence closes $11M private placement to help finance expansion plans

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A photonics company that is hoping to build a semiconductor manufacturing facility in the National Capital Region has issued millions of dollars worth of convertible debentures to help finance its expansion.

Enablence Technologies said last week it closed an $11-million private-placement round with Pinnacle Island LLP and may issue an additional $1 million worth of convertible debentures in a second tranche.

The debentures, which will mature on June 30, 2027, can be converted into common shares of Enablence at a price of $2 per share. 

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The firm also announced it has amended its existing term loan facility with Vortex ENA LP and will consolidate various loan facilities with Vortex that are worth a total of more than $20.6 million. 

Enablence says the moves are designed to help the Kanata-based company finance its strategic growth plan. 

“Our investment partners understand our technology and commercial advantages and how they play into our revenue growth plan,” CEO Todd Haugen said in a statement.

$150M chip fabrication plant

The firm’s long-term growth blueprint includes a proposed $150-million chip fabrication plant in the Ottawa area that would employ more than 100 people.

Enablence, which trades on the TSX Venture Exchange, recently told Techopia it is raising capital to finance a 50,000-square-foot facility that would produce up to 7,500 optical chip wafers a month – more than 10 times the capacity of its current production plant in Fremont, Calif.

“The optics industry is on the verge of exploding,” Haugen said in an interview in May. “There are so many new use cases for it.”

The company, which now assembles its chips in China, says the Ottawa region is a natural choice for a new facility as it looks to consolidate design, production and assembly on this side of the Pacific.

Enablence officials told Techopia they are currently scouting existing industrial properties in the region as well as buildings that are under construction. The firm is also eyeing potential sites on both sides of the Ottawa River where it could build its own facility.

Founded in 2006, Enablence produces optical chip components used in data centres that serve tech giants such as Apple, Google and Meta, the parent company of Facebook.

The company generated revenues of about US$2 million in 2022, down from US$2.5 million the previous year.

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