Murray COD Australia Limited (ASX: MCA) is in the operations of fish farming, hatchery business, cage systems, and nursery business. The hatchery business segment includes Silverwater Native Fish breeds, generally comprising of Murray Cod, Silver Perch and Golden Perch. The company is also into growing the Australian native freshwater fish and ultimately selling it in the market.
The company announced today, on 9th April 2019, that it will raise capital of $6 million by a combination of a private placement to sophisticated investors and a share purchase plan offer to existing shareholders.
It has received firm commitments from the institutional and sophisticated investors to raise $3,765,000 through a share placement at 15.5 cents per share. As a part of the placement, stockbrokers, Curran & Co assisted the group in locating institutional investors.
Murray will also offer existing eligible shareholders shares at the same price as the placement under a security purchase plan to raise up to a further $2,235,000.
The capital raising price represents a ~10% discount to the five-day volume weighted average price, and a premium of 258% to the last capital raising price of 6 cents, which was completed in April 2018, approximately 12 months ago.
The company intends to complete the placement in one tranche of 24,290,323 fully paid ordinary shares in line with the company’s existing placement capacity under ASX Listing Rule 7.1. The new shares are expected to be allotted on or around 11 April 2019.
The company offered the opportunity to its existing eligible shareholders to participate in a Share Purchase Plan, by which it can raise up to $2,235,000 through the issue of 14,419,355 shares at the same price as the placement of 15.5 cents per share.
The Board of Murray reserves the right to withdraw, scale back or even close the Share Purchase Plan offer early, as well as to accept oversubscriptions up to the overall 30% cap permitted.
The complete terms and conditions of the Share Purchase Plan will be outlined in a SPP offer document and distributed to eligible shareholders within the next 10 business days.
The company has an intention to use the funds raised from the placement and the SPP in an expansion of its production capacity through continued feasibility works and development of its ‘Super Site’ which is planned to hold additional 35 ponds. Moreover, the company wants commissioning of the new off-site processing facility to enable value-add processing of its Murray Cod, including smoked product, fish oils and filleted fish. Finally, MCA wants to use the funds in ongoing marketing and branding initiatives with a view of promoting the “Aquna” brand and Murray Cod as a luxury, premium priced product.
On the price-performance front, the stock of Murray COD Australia Limited was trading at A$0.165, with a market capitalisation of ~A$73.39 million (On 9th April 2019 AEST 02:00 PM). The stock has generated a negative YTD return of 12.50%, with returns of -14.63%, -10.26% and 6.06% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at A$0.225, and 52-week low price stands at A$0.059, with an average trading volume of 126,504.
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