(Alliance News) - Velocys PLC on Friday said it has raised GBP6 million through a placing and retail offer of 240.0 million new shares.
Earlier Friday, the sustainable fuels technology company said the books are covered at around GBP6 million for its placing and retail offer.
The fundraise was announced after the market close on Thursday, with an issue price of 2.5p for each. The price is a 26% discount to Thursday's closing price of 3.4p.
Shares in Velocys were down 26% to 2.48 pence each in London on Friday afternoon.
Velocys also announced an open offer of up to 77.6 million shares at the issue price, to raise an additional GBP2 million.
The company said the proceeds will be used for organisation costs including project delivery and business development; engineering scale-up with investment in engineering resource; initial commissioning of the Ohio manufacturing facility; and working capital requirements.
Velocys had voiced concerns over its ability to continue as a going concern.
In the year to December 31, Velocys reported revenue of just GBP200,000, down from GBP8.3 million and said it expects annual revenue to remain uneven in the short-term due to the growing but concentrated number of projects in development whilst the market becomes more established.
Its pretax loss widened to GBP14.0 million from GBP9.5 million the year prior.
Chief Executive Officer Henrik Wareborn said: "We are pleased with the result for the placing and to have received the support of our shareholders as well as a number of new investors. We are now focussed on delivering important value inflection points for the company and continuing discussions with strategic investors into the convertible loan notes."
By Sophie Rose, Alliance News reporter
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