Shares in Corero Network Security dropped over 15 per cent on Friday after the network security and business software provider announced plans to place 27m shares at 15p each with both new and existing shareholders.

The proposed placing would raise up to £4.05m before expenses, which would provide ongoing funding for the continued development of the company's 'First Line of Defense' product proposition, which prevents unwanted data traffic from reaching and overwhelming firewalls and other infrastructure components.

8.13m new ordinary shares will be placed with new and exisiting shareholders, while a conditional subscription of 18.87m shares will be made by certain directors of the company.

The group used the announcement as an opportunity to update investors on its recent performance, saying that its Business Systems division performed strongly in 2012 and said this strong growth expected to continue.

In addition, Corero said its Network Security division has a differentiated network security offering which, together with the infrastructure which has now been established, provides the platform from which to grow the business.

The share price fell 15.38% to 16.50p on Friday.

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