Kefi growth28 Apr 2022 09:18
From Q and A section Kefi website.
Why raise so much in the recent placing?
A: The use of proceeds is set out in the Notice of Meeting released yesterday. The Company’s financial strength is being built up with the scale of activities.
Please bear in mind that of the total development budget, almost all has been arranged from parties other than existing KEFI shareholders. Those other parties need to also see that KEFI has the ability to cope with the imminent growth. KEFI has the responsibility to arrange the human and financial resources for the joint-venture growth. And our partners in the Tulu Kapi development syndicate need to see some big backers join the KEFI share register as we proceed, to strengthen the company for everyone’s sake.
It was important for KEFI to include the warrants (which have an exercise price double the placing price and an accelerator built in for early exercise) as they are expected to cover any further KEFI funding requirement of the $356M Tulu Kapi consortium. I am sure you understand that the Government, which is both our regulator and our partner plus our banks and contractors all need to see KEFI lining up all the $356M required, i.e. the complete package of contracting, debt and equity. And that is what we have done with the support of the institutional investors who have joined the KEFI share register in this placing.
Lastly, whilst KEFI is not allowed to publish forecasts of future valuations per share, it arranged for two analysts to do so and for them to take into account projected changes to assets and capital structure. Their projections are set out in the reports on the website and show over 10-fold upside post recent and future dilution as anticipated by them after management briefings.
Posted 28 April 2022
“Those other parties need to also see that KEFI has the ability to cope with the imminent growth.”
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