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- First Graphene (FGR) is hoping to raise over $6 million from a non-renounceable entitlement offer
- The offer is for one ordinary fully paid share for every ten shares currently held at a price of 13 cents each
- The money raised will be used to fund a three-fold strategy to grow and enhance the business
- Aside from a manufacturing upgrade, there’ll be a bigger marketing spend and accelerated R&D into the company’s new PureGRAPH product
- First Graphene has taken a dive today, shedding 12.9 per cent for a price of 13.5 cents per share
First Graphene (FGR) is hoping to raise over $6 million from a non-renounceable entitlement offer.
The deal
The offer is for one ordinary fully paid share for every ten shares currently held. The company will issue up to a total of 47,507,008 at a price of 13 cents each.
Every share issued will come with one free attaching option, exercisable before August 8, 2021.
The record date is Thursday, May 7, 2020, with the offer to close on Thursday, May 21. Shares will be issued on May 28.
Eligible shareholders may oversubscribe to the offer should there be any shortfall.
The company is seeking to raise a total of $6,175,911 before costs.
The new deal
The money raised will be used to fund a three-fold strategy to grow and enhance the business.
Firstly, the company’s manufacturing facility will have an infrastructure upgrade to expand and further automate production. This will expand FGR’s already significant 100-tonne per year graphene production capacity.
Secondly, the company will increase its marketing activity in Australia – given the company will need to sell its expanded output.
Thirdly, and perhaps most significantly, the company will accelerate research and development on its PureGRAPH product. This will allow the novel material to be incorporated into a new range of rubber and high-density polyethylene products.
While shareholders will rarely be happy with dilution, the 10 per cent increase in shares issued is at least offered to the shareholders themselves, rather than to outsiders. The price of 13 cents isn’t exactly a bargain compared to FGR’s recent ASX performance, but might look a little more tempting down the line with the continued rollout of PureGRAPH.
First Graphene has taken a dive today, shedding 12.9 per cent for a price of 13.5 cents per share as at 3:05 pm AEST.
