CleanTech Lithium Raises £4.3 Million in Placing
Why we think this is neutral
The equity raise by CleanTech Lithium is a mixed bag, with both positive and negative factors to consider. On the positive side, the funds will be used to progress the company's Laguna Verde project and acquire additional licenses, which could enhance growth prospects. The participation of existing institutional investors and a new strategic investor also suggests confidence in the company's long-term potential. However, the 7.4% discount to the previous closing price indicates some investor caution or lack of demand, which could put downward pressure on the share price in the short term. Additionally, the significant 46.2% dilution could be viewed negatively by some existing shareholders. Overall, the impact on the share price is likely to be neutral in the short to medium term.
Key Points
- CleanTech Lithium raises £4.3 million through a placing of 86,000,000 new ordinary shares at 5 pence per share
- The placing shares represent approximately 46.2% of the company's enlarged ordinary share capital
- Funds will be used to acquire additional licenses, progress the Laguna Verde project, and for general working capital
- Existing institutional investors, existing shareholders, and a new strategic investor participated in the placing
Summary
CleanTech Lithium has conditionally raised £4.3 million through the issue of 86,000,000 new ordinary shares at an Issue Price of 5 pence per share, representing a 7.4% discount to the previous closing price of 5.40 pence. The funds will be used to fund the initial payments for the acquisition of an additional 30 licenses in the Laguna Verde project, the final PFS payments for Laguna Verde, DLE technical work, and general working capital requirements. The Placing was supported by existing institutional investors, existing shareholders, and a new strategic investor.