(Alliance News) - Velocys PLC on Friday completed an oversubscribed placing, raising GBP25 million, which will go towards increasing manufacturing capacity.
The Oxford-based fuels technology firm issued 312.5 million shares at a price of 8 pence per share, reflecting a 14% discount from the company's closing price on Thursday at 9.30p.
Shares in Velocys were 13% lower at 8.10 pence on Friday in London.
Major shareholder Lansdowne Partners UK LLP took up 71.4 million of the placing shares. It holds an 18% stake in Velocys.
Proceeds from the placing will go towards advancing two reference projects - Bayou Fuels in the the US state of Mississippi and Altalto in Immingham, England - as well as for capital investment in its manufacturing capability to enable output of at least 12 reactors per year.
Shore Capital Stockbrokers and Panmure Gordon acted as joint bookrunners.
Velocys is still looking to raise GBP2 million through an open offer of up to 25.1 million shares to shareholders, on the basis of two new shares for every 85 existing shares held.
Should the open offer be completed in full, Velocys will have 1.40 billion shares issued overall.
"As a capital-light, licensing company which benefits from recurring revenues from the full-service technology packages we provide to our clients, we have a strong platform for scalable growth. This placing and open offer, which has been significantly oversubscribed, will enable the investment required to advance our commercial traction and proceed towards our goals," said Chief Executive Officer Henrik Wareborn.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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