Leigh Creek Energy (ASX:LCK) share price plummets 14% on capital raise

It’s been a bad start to the week for Leigh Creek Energy shares…
The post Leigh Creek Energy (ASX:LCK) share price plummets 14% on capital raise appeared first on The Motley Fool Australia. –

The Leigh Creek Energy Ltd (ASX: LCK) share price has come out of a trading halt today as one of the worst performers on the ASX. This comes after the energy producer announced a capital raise to progress stage 1 of the Leigh Creek Energy Project.

At the time of writing, Leigh Creek Energy shares are down a sizeable 14.35% to 19.7 cents.

What’s sending Leigh Creek Energy shares lower?

One catalyst for the huge falls in the Leigh Creek Energy share price today may be investor fears over an impending share dilution.

According to this morning’s release, Leigh Creek Energy has successfully raised $18 million (before costs) by a way of placement. The company received support from several Australian and global institutions.

The offer will see 100 million new ordinary shares, at a price of 18 cents each, allocated to participating investors. This represents a 20% discount on the issued capital prior to when the company announced the placement (22.5 cents).

In addition, the new shares will have a one-for-one attached option exercisable at 28 cents within the next 3 years. The issue of the options however is subject to shareholder approval

Leigh Creek Energy will seek to use the proceeds from the capital raise for a number of initiatives. This includes the acquisition of a 3D seismic, drilling and construction of gasifier chambers, acquisition of power generation infrastructure, and general working capital.

Management commentary

Leigh Creek Energy managing director, Phil Staveley spoke about the company’s capital raising efforts:

This $18 million capital injection will enable LCK to continue to move forward with Stage 1 of our flagship project with added confidence and puts us one step closer to our goal of building a plant at Leigh Creek which can deliver urea into the Australian and overseas markets.

The opportunity presented by this capital raise means we can immediately focus all our resources and attention on driving forward the commercial stages of the project.

In the coming weeks we expect to execute the final agreement for engineering, procurement, construction and completion of the urea plant with Korean giant, DL E&C and offer further equity to our existing, loyal shareholders.

The Leigh Creek Energy has gained over 100% in the past 12 months, and is up 14% year-to-date.

The post Leigh Creek Energy (ASX:LCK) share price plummets 14% on capital raise appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Why Austal, Cettire, Leigh Creek Energy, & McPherson’s are sinking today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!