- Carbonxt Group Limited has revealed a non-renounceable pro-rata entitlement offer at $0.15 per share to raise A$2.06 million.
- The offer is on the same terms as the A$2.1 million placement, completed with solid support from sophisticated and professional investors.
- The offer is to fund expansion of Activated Carbon pellets, with a new Kentucky-based 5,000 ton per annum pellet facility to be completed in Q2FY22.
Carbonxt Group Limited (ASX: CG1) has launched a non-renounceable pro-rata entitlement offer to its existing shareholders in a bid to raise A$2.06 million (before costs) to support its cleantech products. The offer is on the same terms as the A$2.1 million placement, recently wrapped up by the Company with strong support from sophisticated and professional investors.
Moreover, the purpose of the offer is to support the development of Activated Carbon pellets and fund general working capital.
Following the latest update, CG1 shares surged 4% on 21 May 2021 to close at A$0.135.
Lens through the terms of the Offer
Under the Offer, eligible shareholders can apply for one new fully paid ordinary share for every 11 existing ordinary shares held on 26 May 2021 (at 7.00 pm -Sydney Time) at an offer price of $0.15 per share. The Company will issue one free attaching option exercisable at A$0.24 on or before 21 June 2023 for every two new shares issued.
The offer price represents:
- A 15.4% premium to the last closing price of A$0.130 on 20 May 2021
- A 15.4% premium to the 10-trading day VWAP (Volume Weighted Average Price) up to and including 20 May 2021.
The Company expects that up to ~13.71 million new shares and ~6.88 million new options may be issued pursuant to the offer. Notably, the offer is partially underwritten by Chaleyer Holdings Pty Ltd up to $1 million value.
Source: CG1 ASX update, dated 21 May 2021
Carbonxt Operations Catered to offer Cleantech solutions
The cleantech company, Carbonxt, develops, manufactures and markets proprietary Activated Carbon products, which are used for eliminating mercury and other toxic pollutants from wastewater streams, industrial flue gas and other industrial emissions.
The patented Activated Carbon products are produced in two forms, including non-brominated powders and pellets. While coal-fired power plants use activated carbon powder products for achieving emission compliance, pellet products are widely used across heavy manufacturing, filtration, and wastewater treatment.
Source: Copyright © 2021 Kalkine Media, Data Source: CG1 ASX update, prospectus dated 21 May 2021
In addition to the above three facilities, Carbonxt has another small R&D facility based in Gainesville, Florida.
Work Progressing to Advance New Carbon Pellet Facility
Facility Funding and Revenue
Carbonxt expects its new Kentucky-based 5,000 ton per annum pellet facility to be completed in the second quarter of FY22. The counterparty will wholly fund the facility, which is expected to improve gross margins and eliminate working capital requirements of Carbonxt Group for industrial pellets.
Meanwhile, the Company is expected to generate an additional A$20 million in revenue and 20-30% profit margins when the facility reaches full production.
Construction Permit for the Facility
The Company has reached a contract for the plant, subject to a condition precedent to obtaining a construction permit. The Company expects that the permit would be granted in the next 4-6 weeks, with construction to kick off immediately thereafter. Significantly, all designs works are complete, and the counterparty has sourced most of the equipment.
Given the imminent plan to complete the new pellet facility, the Company has decided to defer further production of CTC, including commodity or industrial pellets, until operations commence at the Kentucky facility.
The shares of CG1 closed at A$0.145 on 25 May 2021.