MGC Pharmaceuticals Ltd (ASX:MXC) (FRA:H5O) (LON:MXC) is set to become the first medicinal cannabis company to be admitted to the main market of the London Stock Exchange (LSE) on Tuesday, February 9.
This follows a strongly supported £6.5 million (around A$12 million) share placement led by leading UK institutional fund managers and supported by UK family office and professional high net worth investors.
The binding commitments were obtained following an announcement of the company’s proposed LSE listing on February 2.
“Already seeing the benefits of this decision”
Co-founder and MD Roby Zomer said: “This is something we have been working towards for over 18 months, realising our strategic ambition to be closer to our operations in Europe with greater access to key UK and European strategic investors.
“We are already seeing the benefits of this decision, with the strong show of support from a number of leading UK institutional funds and sophisticated investors for the placing, which was significantly oversubscribed, to coincide with our LSE listing.
“The funds will primarily be used to support the company’s growth ambitions and key clinical research programs for our leading products, as we continue to expand our manufacturing capabilities, increase our product range and expand into new and existing key markets.”
Use of funds
Following completion of the placement, MGC Pharmaceuticals will have cash reserves of around $12.6 million.
The European-based bio-pharma company plans to use the net proceeds to:
- Meet the costs associated with a Phase III clinical trial of ArtemiC™ planned for H1 2021;
- Meet the costs associated with a Phase IIb clinical trial of CannEpil®;
- Increase distribution of the group’s product range and expansion into new key markets to drive sales growth and future revenue, including Brazil and major EU countries;
- Meet the registration costs for ArtemiC™ in new markets, including Russia, the Middle East and Europe; and
- For general working capital purposes, including completing construction of the group’s proposed manufacturing facilities in Malta.
Placement
A total of around 441 million new shares will be issued under the placement at an issue price of £0.01475 per new share (A$0.0266), which, using current exchange rates, is a premium to the last closing share price of A$0.026 on February 1, 2021, prior to the company’s request for a trading halt for the capital raise.
This placement will raise £6.5 million (around A$12 million) before costs, utilising the company's available placement capacity pursuant to ASX Listing Rule 7.1 and 7.1A.
Turner Pope acted as sole and exclusive lead manager and bookrunner for the placing, which was extremely well supported by several UK institutional fund managers, led by Premier Miton and Chelverton Asset Management, alongside other UK family offices and high net worth investors.