Applied Graphene Materials PLC (LON:AGM) raised £6mln overnight from institutions and private investors for working capital to help it serve expected growth in customer and product demand.
An accelerated placing raised £5.3mln at a price of 41p per share, a discount of 39% to previous day’s closing price, with another £0.7 raised via a subscription and offer on the PrimaryBid platform, the company confirmed in a statement on Wednesday.
The AIM-listed company said the placing and PrimaryBid offer were both oversubscribed, while certain directors subscribed for £71,000-worth of shares in the subscription.
Giving more detail on the need for the extra funds, Applied Graphene Materials' board said it believes the group has a product range and third party distributor network to capitalise on the opportunities in its markets and accelerate commercial momentum.
Current cash levels would be enough to sufficient working capital to operate to October this year, but the fundraising is "necessary to execute the next stage of its growth plan", the board said.
As well as to provide ongoing working capital funding, including costs associated with continuing the product and technology development roadmap, and to service of anticipated growth in customer and product demand, the funds will also enable minor capital expenditure, including a coating spray booth to bring full control of testing in-house.
Since its full-year results in October, Applied Graphene Materials has been enjoying a healthy news flow, including that the European Chemical Agency has allowed members of the Graphene REACH registration consortium to supply high volumes of graphene materials for a range of applications and the signing of a number of commercial agreements, including a distribution agreement with one of South Korea's leading chemicals distributors to extending its commercial focus into the coatings and polymers sectors.
Since its July year-end, trading has been in line with board expectations for the current financial year, the company added, with continuity of operations maintained throughout the coronavirus (COVID-19) pandemic.
"Restrictions on end-customer work practices have, however, limited practical access to structures for the deployment of their graphene-based coatings products, with customers furloughing staff and reducing operational activity. The quality of underlying customer engagement remains strong and the directors are confident that the eventual easing of lockdown restrictions will lead to a positive upswing in activity for the company," the company said in a statement.
Chief executive Adrian Potts added: "We are grateful for the support of our existing shareholders and would like to welcome new investors to the company.
"We believe that we are well positioned to deliver on our broad pipeline of opportunities for the use of graphene nanoplatelet material in a variety of applications. The proceeds of the oversubscribed fundraise will provide us with the financial resources necessary to capitalise on the exciting opportunities in our markets and accelerate the growth of the business."
