Industrial holding company HC2 Holdings agreed on Monday to invest up to $23.7m in US-based wireless technology developer Novatel Wireless.
The funding consists of an upfront cash payment of $14.4m in return for a 17% share in Novatel Wireless, and an additional $9.3m in warrants that can be converted to cash at a later date, which would boost its stake to 25%.
Founded in 1996, Novatel Wireless went public in 2000. The share price of the wireless broadband technology company has however sunk since then, falling from a high of over $200 in 2001 to $2.32 at the time of publication.
Novatel Wireless posted a $26.4m loss for the first half of 2014 from revenues of $85.6m that were less than half those recorded in the six months previous.
Alex Mashinsky, CEO of Novatel Wireless, said: “HC2 has a strong track record of partnering with companies to help them accelerate their growth and realise their potential.
“We are excited about the opportunity to leverage their deep experience in wireless technology and telecommunications infrastructure to further Novatel Wireless’ strategic and business success. We also expect our strengthened balance sheet to positively impact our supplier and customer relationships.”