Lithium Australia NL (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) has raised $4.5 million in a strongly supported share purchase plan (SPP), more than double the initial $2 million target.
The funds raised, in conjunction with $4 million in placement funds, will be used to progress the company’s sustainable energy metals strategy as well as retiring all debt.
The company primarily aims to commercialise the battery recycling business of its subsidiary Envirostream by facilitating its marketing and battery collection network.
It will also use proceeds to cover the marketing cost of its subsidiary Soluna Australia Pty Ltd, which sells renewable-energy battery storage systems.
“Very pleased” with support
Lithium Australia managing director Adrian Griffin said: "We are very pleased that our shareholders backed the company’s vision of sustainability in the energy metals space.
“The additional funds raised will allow all debt to be retired, improving the company’s balance sheet and accelerating the expansion of Envirostream, our battery recycling subsidiary.
“This comes on the back of the Australian Consumer and Competition Commission approving a national battery stewardship scheme to encourage battery recycling, which will provide greater opportunities for Envirostream.”
Pay-down of Lind convertible note
The company is planning to pay-down the current Lind Macro Fund LP convertible note, which it believes will benefit existing shareholders.
Last year, The Lind partners invested around $ 3 million in the company through a convertible security and share purchase funding agreement to fund battery sales and battery recycling growth.
LIT plans to repay the outstanding balance on the convertible note from Lind by using additional funds generated from the SPP.
The final amount to be repaid will depend upon the terms and conditions of the convertible note, which include certain rights accruing to the noteholder when a buyback notice is received.
Lithium Australia said it was very appreciative of the support provided by Jeff Easton and his team at Lind.
Follows $4 million placement
Last month, Lithium Australia launched the SPP allowing eligible shareholders to subscribe for equity on terms identical to those for the recent placement.
Targeting an additional equity issue of $2 million, the SPP gave eligible shareholders the right to subscribe for up to $30,000 worth of shares in the company free of brokerage and fees.
The placement to institutions and sophisticated and professional investors was also heavily oversubscribed and raised $4 million.