Sustainable fuels company Velocys PLC (AIM:VLS) took a dive on the AIM market this Friday after announcing the £6mln placing of shares at 2.5p each, a 26% discount to Thursday’s closing price.
Shares consequently fell to 2.5p with a market capitalisation of £34.7mln when Friday trades commenced.
Alongside the placing, Velocys announced a £500,000 retail offer and £12mln of convertible loan notes in a conditional offer to US investment firm Carbon Direct Capital.
The multifaceted fundraising exercise was launched to shore up working capital requirements, support organisational costs, and help with the commissioning of an Ohio manufacturing facility.
Investors were spooked by Velocys’ fundraising announcement, particular as it followed a fall in revenues and surge in operating losses outlined in Thursday’s preliminary results, published after the closing bell.