Sprintex Ltd (ASX:SIX) has struck a deal to secure funding from its largest shareholder, China Automotive Holdings Ltd (CAHL), with an underwriting agreement.
Funding of nearly a million
The agreement ensures that CAHL will underwrite any shortfall in the exercise of up to 12,871,111 options priced at 7.5 cents expiring on December 31, representing a funding potential of up to A$965,333.
In return, Sprintex will pay an underwriting fee of 5% of the underwritten amount, equating to up to A$48,266.65.
With a market capitalisation of around A$41 million, the option funding will further strengthen Sprintex’s financial position.
“I am very supportive of management and look forward to reaping the rewards with all the hard work put in to date,” China Automotive Holdings Limited chair Rick Siemens said.
Cheap at the price
Siemens went on to indicate that the share price and the current market cap of $41 million, when set against recent positive newsflow and the potential successes on the horizon, made the company an attractive proposition.
This arrangement provides funding certainty for Sprintex as it progresses its strategic initiatives and builds on recent momentum.
It also demonstrates there is strong support from CAHL for the company’s management and growth trajectory.
“I am looking forward to the chair achieving his performance milestones of $100 million market cap by June 2025,” Siemens added.