Babylon Pump & Power Plans to Issue 12 Million Shares and Options Through Convertible Loan Agreements

Babylon Pump & Power’s Corporate Profile and Core Operations

Babylon Pump & Power Limited, listed on the ASX under ticker BPP (ABN 47 009 436 908), specializes in providing pumping and power solutions. As a publicly traded company, it adheres to ASX listing rules and continuous disclosure requirements, ensuring transparency on significant corporate activities such as capital raises and security issuances.

Operating within the industrial equipment and services sector, the company serves industries including construction, infrastructure, agriculture, and mining. The announcement of convertible loan arrangements and the subsequent equity issuance highlights the company’s pursuit of alternative financing methods, potentially to support working capital or expansion. The convertible loan structure indicates lender confidence and offers flexibility in capital management by converting debt into equity.

Details of the 12 Million Ordinary Shares Issuance at $0.05 Deemed Price

Babylon Pump & Power proposes issuing 12 million fully paid ordinary shares at a deemed price of $0.05 per share, equating to an aggregate value of about AUD 600,000. These shares will have equal rights, voting power, and dividend entitlements as existing shares from the issue date. The issuance represents repayment of funds advanced under Convertible Loan Agreements, converting lender debt into equity.

Classified as an "existing class" security since BPP shares are ASX-listed, this issuance will utilize part of the company’s 15% placement capacity under ASX Listing Rule 7.1, thus not requiring separate shareholder approval. The shares are scheduled for issue on 28 August 2026, enabling streamlined equity conversion without a dedicated shareholder meeting.

Issuance of 12 Million Unlisted Options with $0.10 Exercise Price and Three-Year Expiry

Alongside the shares, Babylon Pump & Power plans to issue 12 million unlisted options with a $0.10 exercise price and an expiry date of 28 August 2029. These options, issued for nil consideration under the same Convertible Loan Agreements, represent a new class of securities not yet ASX-quoted. Each option converts into one fully paid ordinary share upon exercise.

Unlike the shares, these options require shareholder approval at a General Meeting scheduled for 21 August 2026, prior to the proposed issue date of 28 August 2026. The three-year expiry offers option holders a window to exercise if the share price exceeds the exercise price. ASX has yet to assign a permanent security code for these options pending approval.

Shareholder Approval Process and Meeting Timeline

Shareholder approval for the unlisted options will be sought at a General Meeting on 21 August 2026, a crucial step for proceeding with the options issuance. The company has submitted necessary disclosures to ASX, including a release dated 21 July 2026 detailing the convertible loan terms.

The 12 million ordinary shares do not require shareholder approval as they fall within the company’s 15% placement capacity under ASX Listing Rule 7.1. This distinction reflects ASX rules on different security classes and their dilutive effects. The General Meeting’s Notice will include full terms of the Convertible Loan Options, ensuring shareholders are well-informed before voting. The timeline allows approximately one week between approval and issuance on 28 August 2026.

Capital Raising Context and Lead Manager Roles

This securities issuance forms part of a broader capital raising initiative referenced in ASX announcements dated 13 July 2026 and 21 July 2026. The convertible loan conversion is a component of a multi-pronged financing strategy aimed at strengthening the company’s financial position or funding strategic projects.

Cumulus Wealth and Leeuwin Wealth serve as Joint Lead Managers, earning a 3% management fee on gross proceeds across the broader capital raising. Their joint involvement suggests access to a wider investor base and enhanced distribution capabilities to ensure successful placement, complying with ASX and securities regulations.

Key Dates and Execution Schedule

The capital raising announcement was made on 21 July 2026. The General Meeting for shareholder approval of the Convertible Loan Options is set for 21 August 2026, providing shareholders about one month to evaluate and vote. The issuance of both the shares and options is planned for 28 August 2026, one week after the approval date, reflecting management’s intent for swift execution. The options will expire on 28 August 2029, giving holders a three-year exercise period.

Absence of Related Party Involvement and Security Restrictions

The company confirms no related parties as defined by ASX Listing Rule 10.11 are involved in this issue, indicating the convertible loans originate from independent third-party lenders. Furthermore, none of the securities will be classified as restricted or subject to escrow, ensuring they will be freely tradable post-issuance subject to standard ASX trading rules.

Convertible Loan Consideration and Mechanics

The 12 million ordinary shares are issued in exchange for repayment of convertible loan funds at a deemed price of $0.05 per share, totaling AUD 600,000. This conversion replaces cash repayment with equity issuance. The 12 million unlisted options are issued for nil consideration as an incentive component under the same agreements, offering lenders upside potential through option exercise at a higher strike price.

Impact on Shareholders and Ownership Dilution

The issuance of 12 million shares and 12 million options will dilute existing shareholders’ stakes, though the exact dilution depends on the current total shares outstanding, which was not disclosed. The shares convert existing debt without new cash inflow, while the options represent additional dilution. The use of the 15% placement capacity ensures compliance with ASX rules, but option exercise could further increase share count. Investors should evaluate the strategic rationale and expected benefits from the capital raise.