LONDON (Alliance News) - Hydrodec Group PLC said on Monday it plans to raise GBP10.0 million, double its current market cap, through a placing of 13.3 million shares at a price of 75 pence per share.
The placing follows a proposal to consolidate Hydrodec's shares on a 1-for-100 basis. Assuming the consolidation takes effect, the price reflects a 41% discount to the closing price of 1.275p on Friday last week.
Shares in the oil re-refining group fell 41% at 0.75 pence on Monday, matching the offer price prior to the consolidation. That gave Hydrodec a market capitalisation of GBP4.6 million.
The consolidation is expected to take place on October 26, and is subject to gaining shareholder approval at the general meeting the day before.
In addition, Hydrodec is proposing to issue 3.7 million shares to qualifying shareholders in an open offer at the placing price to raise a maximum of GBP2.8 million.
Proceeds from the share issue will go towards acquiring feedstock to improve supply levels, funding a research and development collaboration with Slicker Recycling, repay loans from reduce debt levels and working capital purposes.
"We are pleased to see such high quality institutional support for the Hydrodec 'green oil story'. This is an endorsement of the board's turnaround strategy and reinforces the substantial potential for the relaunched Hydrodec to deliver material value for investors. David Dinwoodie, our new CEO, intends to brief shareholders regularly on our progress as we drive the business forward on a newly strengthened financial platform with a clear strategic focus," said Executive Chairman Colin Moynihan.
