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Iofina PLC

Iofina to raise up to £7.5mln to pay off debt and expedite construction of new production facility

The funds raised will also go towards completing upgrades at Iofina's other plants, while some have been earmarked for investment in new product development at Iofina Chemical.

Pounds
Iofina wants to accelerate its plant upgrading programme

Iodine producer Iofina PLC (LON:IOF) is to pull the trigger on the fundraising it has been considering.

The company plans to raise up to £7.5mln through the issue of shares at 16p each. Iofina shares closed at 18.52p on Friday.

WATCH: Iofina's Tom Becker discusses £7.5mln raise to fast-track development of new plant

The funds from the issue will eliminate the firm’s US$3.26mln loan facility and will provide capital to accelerate the development and construction of the IO#8 iodine processing plant.

Iofina said one of its secured lenders, Southern Rock Insurance, has agreed to convert three-quarters of the total debt owed to it through a loan note issue into Iofina shares.

The company owes Southern Rock roughly US$5.59mln, of which about US$4.19mln will be wiped out through the issue of shares at an assumed price of 16p each.

Iofina’s existing shareholders will also be given the option to buy shares at 16p a pop through an open offer. The company is looking to raise £2.04mln - as part of the total £7.5mln it plans to raise - via the open offer, with shareholders being given the option to apply for additional shares in excess of their standard entitlement.

"Given complex market conditions, we believe that it is in the best interests of shareholders as a whole to conclude this oversubscribed placing,” said Dr Tom Becker, the president and chief executive officer of Iofina.

"The strengthening iodine prices and demand makes it an opportunistic time to execute on our expansion plans. We have identified areas for growth and will utilise the new funds to fast-track investment in new plants, as well as to upgrade existing plants, which will increase iodine production and further enhance cost control measures,” Becker said.

Shares in Iofina were trading at 18.1p, down 2.3%, in early deals.

Quick facts: Iofina PLC

Price: £0.24

Market: LSE
Market Cap: £46.62 m
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