Carbonxt Group (ASX:CG1) boosts capital position with $7M placement

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  • Carbonxt is undertaking a capital raising program to fund its new state-of-the-art activated carbon plant in Kentucky.
  • The placement aimed at raising AU$7 million has received considerable support from existing and new investors.
  • The company would target to raise AU$1 million under its share purchase plan.
  • Carbonxt has been experiencing tailwinds for its products amid the growing focus of industries on reducing their emissions footprint.

Carbonxt Group Ltd (ASX:CG1) is undertaking a capital raising program to boost its production capacity to meet the growing demand for its activated carbon solutions in the United States.

The US-focused cleantech company has received commitments from existing and new investors to raise AU$7 million through a placement of 70 million fully paid shares at AU$0.10 per share before costs in two tranches. 

The placement price reflects a 4.8% discount to the last closing price of CG1 shares.  

Additionally, the company is offering a share purchase plan to its existing shareholders with a record date of 23 Sep 2022. The company is targeting to raise AU$1 million, and the offer booklet will be dispatched on Friday, 30 Sep 2022.

Funds to aid new activated carbon plant in Kentucky

Carbonxt plans to use the proceeds raised to fund its initial 40% share in a new state-of-the-art activated carbon plant in eastern Kentucky, US. The plant is a joint venture with KCP. The funds raised will also be used to cover the cost of the offer and general working capital.

Carbonxt holds an option to buy an additional 10% stake in the joint venture for US$2.2 million. The option will be exercisable by 30 Sep 2023 or 1 month after the initiation of operations, whichever date appears earlier.

The Kentucky facility has all its required construction and operations permits. The partners are set to commence the key engineering mobilisation activities when the initial placement funds are received.

The facility is expected to boost the company’s production capacity by 50% from 16,000 tonnes to over 24,000 tonnes of activated carbon products. The development would also enable the company’s entry into the granular activated carbon market valued at US$500 million, substantially boosting CG1’s addressable market.

Commenting on the capital raising program, CG1 Managing Director Warren Murphy said that the added manufacturing capacity, and the capacity to offer granular activated carbon products, will enable the company to tap into a much broader range of sectors.

This is a game transforming funding for Carbonxt, setting it up remarkably well in a sector with strong tailwinds, Murphy added.

At the time of writing this article on 26 September 2022, the share price of CG1 stood at AU$0.105 apiece.   



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