Rakon has been planning to sell stakes at deep discount, in a bid to raise $65 million to carry out its business plans. The firm, which manufactures components for navigation devices, would adopt institutional placement route to offer stakes at 26 per cent discount for its $20 million share purchase plan.

Alan Moore, a fund manager at Milford Asset Management said: "It's a big ask if Rakon wants to raise $65 million - Tower just raised $100 million and it's a far more diversified company." Rakon hopes to raise capital around 35 per cent of its $186 million market value in an attempt to join the growing list of companies such as Nuplex Industries and Tower who cut their debts in the wake of global credit crunch and strengthen their balance sheet.

Rakon will use $30 million for completing the first construction stage of a new Chinese manufacturing factory that was put on hold last year due to global financial crisis, while some amount will be used for debt repayments and other growing financial needs. Meanwhile, the NZX has stopped trading in shares of Rakon on the request of the company till the completion of first trenches of the placement.

The firm said, in a statement: "The scale of earnings growth opportunities in front of us, and the speed at which they are developing, gives us confidence that now is the right time to proceed."