(Sharecast News) - Sustainable fuels technology company Velocys successfully raised £6m in a placing and retail offer on Friday, to be used on the scale-up of manufacturing and the commissioning of its Ohio facility.
The AIM-traded firm placed 240 million shares at an issue price of 2.5p each, representing a discount of about 26.9% compared to the closing middle market price on 17 May.
Existing retail shareholders were allocated 100% of their soft preemptive allowance through the retail offer.
The board said the net proceeds from the placing, retail offer and open offer would primarily be used for organisational costs, engineering scale-up, initial commissioning of the Ohio manufacturing facility, and working capital requirements to invest in achieving supply chain resilience and covering the timeline of grant receipts.
"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," said chief executive officer Henrik Wareborn.
"We are now focussed on delivering important value inflection points for the company, and continuing discussions with strategic investors into the convertible loan notes.
"The proposed transaction in Velocys, which follows recent positive project funding updates on the Altalto reference project, will help consolidate our position as the leading global provider of sustainable aviation fuel technology and enable the supply of negative carbon intensity fuels to airlines and others aiming towards net zero targets."
At 1209 BST, shares in Velocys were down 26.87% at 2.5p.
Reporting by Josh White for Sharecast.com.
