Buru Energy Limited (ASX:BRU) (OTCMKTS:BRNGF) (FRA:BUD) has received firm commitments from institutional, professional and sophisticated investors to raise a total of $15 million at 15 cents per share.
The company is also undertaking a share purchase plan (SPP) to raise up to $5 million from existing shareholders at 16 cents per share.
“Exciting exploration program” at Canning Basin prospects
Buru’s $15 million share placement attracted strong support from domestic and international institutional investors, as well as sophisticated and professional investors, with bids significantly above the placement limit.
Executive Chairman Eric Streitberg said: “The strong support for this raising reflects the exciting exploration program due to commence in mid-June on our world class Canning Basin prospects, and the future participation by the company in the integrated energy economy.
“This is the first capital raising undertaken by Buru outside our existing shareholder base since 2014 and we would like to warmly welcome those new shareholders who have supported the placement.
“We would also like to thank our existing shareholders for their continued support of Buru, and are pleased to provide an opportunity for all eligible shareholders to further participate in their company via the SPP which I am also pleased to be able to participate in.”
Share purchase plan
Buru’s SPP to raise up to $5 million will open on 6 May 2021 and will provide all eligible shareholders, as at the record date of 29 April 2021, with the opportunity to apply for shares at 16 cents per share.
The SPP Price of 16 cents (which is 1 cent higher than the placement price), is necessary due to ASX Listing Rule 7.2 which does not permit the issue of shares under a share purchase plan to be at a discount greater than 20% to the 5-day VWAP.
Under the SPP, each shareholder who held Buru shares as at 7:00pm (Sydney time) on Thursday, 29 April 2021, with a registered address in Australia or New Zealand, will be entitled to participate and purchase shares up to a value of $30,000.
The key indicative dates for the placement and SPP are as follows:
Use of proceeds
The funds raised by the placement and SPP totalling up to $20 million will be applied towards Buru’s 2021 Canning Basin exploration and development program, growth opportunities, and for general working capital purposes including associated capital raising costs.
The funds raised will supplement Buru’s existing cash reserves and provide support for ongoing exploration, appraisal and development activities following the 2021 program.
Streitberg added: “The funds raised will put Buru in a strong financial position to execute its exploration and development strategy within its Canning Basin joint ventures as part of our 2021 program and beyond, as well as to pursue new business opportunities.”