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Distil (LSE:DIS) experienced a significant decline of 27% following the announcement of a heavily discounted placing aimed at raising £650,000 in working capital. This funding will primarily support the production and promotion of several key brands, including RedLeg Spiced Rum, Blackwoods Gin and Vodka, TRØVE Botanical Vodka, and Blavod Black Vodka, particularly in preparation for the Christmas season.
The company revealed that non-executive director Roland Grain would contribute £200,000, while former ITM Power CEO Graham Cooley would add another £90,000 to the fundraising effort. Shares are being issued at a price of 0.12p, reflecting a 40% discount from the previous trading price, and come with attached warrants that can be exercised at 0.36p.
In a statement, Don Goulding, Distil’s executive chairman, emphasized the importance of this funding for working capital and brand activation during the critical trading period from October through December. The additional resources are intended to enhance the company’s competitive positioning as it aims to expand its distribution network in 2025.
The newly issued shares will account for approximately 37.3% of the enlarged share capital. To facilitate this fundraising effort, Allenby Capital has been appointed as the company’s broker, signaling a strategic move to strengthen Distil’s financial foundation during a pivotal time for the business.
Following the announcement, shares fell by 0.06p, closing at 0.15p. This downturn reflects market sentiment concerning the company’s current challenges and the substantial dilution associated with the fundraising effort. The management’s focus on enhancing brand visibility and production capabilities may provide a pathway for future growth, but the immediate impact of the discounted placing has created a cautious atmosphere among shareholders.
As Distil navigates this critical juncture, the emphasis will be on effectively utilizing the newly acquired capital to bolster its market presence and drive brand performance. The coming months will be crucial for assessing the impact of this funding on the company's overall trajectory and its ability to capitalize on seasonal demand.
