SRJ Technologies Group PLC (ASX:SRJ) has signed a $3.5 million convertible loan facility with Mercer Street Global Opportunity Fund LLC, which includes a committed portion of $1.4 million.
Funds raised from the offering will strengthen SRJ’s capital position and balance sheet, supporting the acceleration of sales and marketing growth initiatives as the company executes on its significant growth pipeline.
“Flexibility to draw down funding”
SRJ chief executive officer Alex Woods said: “The convertible note facility with Mercer provides the company with flexibility to draw down funding as it is needed.
“The company is starting to see increased conversion of sales leads which should lead to increased revenue.”
Details of convertible note facility
The convertible note facility consists of:
- 1,610,000 convertible notes with a face value of A$1.00 each, representing an investment amount of $1,400,000 and a $210,000 premium which will be drawn down in two tranches;
- up to a further A$2,100,000 which may be drawn down under the facility by the issue of further convertible notes.
The conversion of the notes to equity is linked to the market price of SRJ's shares (higher of 5 cents or ~90% of the share price) which therefore may result in less dilution if the share price increases as the business grows.
Woods added: “The convertible note facility will allow the company to draw down further funding as it needs and then raise additional capital when the company is in a stronger position.
“The Mercer facility replaces the Raleigh facility approved by shareholders at the 2022 annual general meeting which has now been repaid.”
Contract wins in Africa
SRJ was recently awarded a further contract in West Africa for the long-term lease of its flange bolt integrity equipment for a major hot bolting campaign.
The contract win, via SRJ’s local partner EnerMech, arrives after the successful completion of hot bolting service offshore Ghana and Ivory Coast using the company’s proprietary BoltEx® flange clamp technology.