LONDON (Alliance News) - Collagen Solutions PLC on Monday said it will raise GBP6.0 million via an investment from a US partner, together with a share placing and open offer.
The biomaterial manufacturer said it has received a GBP4.2 million investment from Rosen's Diversified Inc, a US food production and agri-chemicals company. The company issued 83.6 million shares at 5 pence each to Rosen.
Rosen operates the fifth largest beef processing company in the US. The investment in Collagen is accompanied by a supply agreement with Scientific Life Solutions, a subsidiary of Rosen, for the supply of tissue by Colleagen.
Furthermore, Collagen is planning to raise GBP1.8 million in a placing and open offer of shares, also at 5p. The placing will be for 25 million shares while the open offer will cover 11.6 million shares on the basis of one new share for every 28 already held.
The company said it has already received written commitment for the take up of 8 million shares under the open offer from an existing investor.
The fundraising price represents a 23.5% premium to Collagen's closing share price on Friday. Collagen shares were trading up 17% at 4.72p each on Monday.
The proceeds of the fundraise will go towards expansion of contract manufacturing activities, product development, and the repayment of existing debt, and to fund working capital, the firm explained.