The future of vanadium flow machine company redT has been plunged into doubt after it launched a strategic review of its ongoing business.

The review, launched alongside an emergency fundraising drive, has resulted in the redundancy of nearly 25% of redT’s workforce and a frank admission that it could cease to trade if it fails to raise enough cash.

There have also been changes at board level, with chairman Jeff Kenna standing down and Scott McGregor also withdrawing, but remaining at the company to handle day-to-day operations.

In a statement to the market yesterday afternoon, London Stock Exchange-listed redT confirmed that it had raised £940,000 via a placing of 47 million ordinary shares with VSA Capital to fund them during the review period. It has also launched an Open Offer for qualifying shareholders to acquire new shares at 2p per share, aiming to raise up to £2.26 million.

After raising £5 million from a new placing in October last year, redT stated that it was on the lookout for strategic partners to support and finance its future growth. While the firm has been and remains in discussions with such partners, it has now reached a point where those discussions would not complete in time to rescue the company.

RedT said that at the beginning of this month it had cash reserves of £1.7 million which, combined with an expected £1.5 million of proceeds from the placing and Open Offer, would be able to fund the business for “at least the next four to six months” depending on a divestment of the US-facing business.

The company has however confirmed that regardless of the funds raised through the placing, it will not be sufficient to see it through to cash generation, and that failure to raise the minimum amount could result in it being left unable to trade, resulting in a “very accelerated” search process for new funding.

Former non-executive director Neil O’Brien has returned to lead the strategic review and been named executive chairman.

A major cost-cutting exercise has been implemented, with a focus on closing and delivering large projects in the UK, Germany and Australia. Staffing requirements are to be slashed, amounting to a 23% reduction in staffing levels for which a redundancy process has already started.

But there are signs that interest in redT’s vanadium technology is on the rise. Today’s statement reveals that it has signed a partnership agreement with an unnamed, “major European energy company” to offer a fully-financed, solar-plus-energy storage product to C&I customers in the UK.

This is expected to deploy 100MW of solar and 60MWh of energy storage over the next three years, with further details to be announced “in due course”.

In addition, earlier this month redT signed a purchase agreement to supply ~5MWh worth of storage units for a large-scale grid project in the UK. Delivery is scheduled for across 2019 and 2020.

In total, the firm has a weighted pipeline worth £145 million, of which £32 million has reached the project development stage.

Shares in redT have plunged since the announcement, falling from 3.42p at midday yesterday to a low of 1.22p this morning, equivalent to a drop of some 64%.