The Ecograf ASX: EGR) share price is on a wild ride this morning. We take a look at the company’s latest capital raising announcement.
The post Why is the Ecograf (ASX:EGR) share price on a wild ride today? appeared first on The Motley Fool Australia. –
The Ecograf Ltd (ASX: EGR) share price is on a wild ride this morning. Initially down more than 6%, the share price then went up 3%. At the time of writing, the Ecograf share price is back down 3% at 97 cents.
The share price movement comes after the graphite producer and supplier reported on the completion of its capital raising.
What did Ecograf report on its capital raising?
In an announcement to the ASX this morning, Ecograf reported it has firm commitments from institutional, sophisticated and professional investors to raise $54.6 million (excluding costs).
Ecograf will issue around 91 million new fully-paid ordinary shares for 60 cents per share. That’s a significant discount to the current 97 cents per share. Ecograf said that “a share purchase plan for all retail shareholders was not possible at this time”.
The company plans to use the new capital to advance its battery anode material recycling programs as well as for the construction and operational commissioning of the first phase of its battery anode material purification facility in Western Australia.
Ecograf also intends to finalise the debt financing arrangements for its Epanko graphite mine.
On Monday, the company announced that GR Engineering Services Ltd (ASX: GNG) would provide the engineering design for its new battery graphite facility in Western Australia. That facility will use the EcoGraf purification technology to provide quality battery anode material products to lithium-ion battery and anode manufacturers.
According to the company, a key advantage of the EcoGra eco-friendly process is “the elimination of the use of toxic hydrofluoric acid (HF), providing customers with ‘HF Free’ battery products that support the increased focus on supply chain environmental, social and governance (ESG) requirements”.
Ecograf share price snapshot
Though up and down for the day in morning trade, the Ecograf share price has been rocketing in 2021.
Shares really began to surge in mid-January, and year-to-date the Ecograf share price is now up an eye-popping 485%. But comparison the All Ordinaries Index (ASX: XAO) is up just over 2% in 2021.
Over the past 12 months, Ecograf shares have gained 1,144%.
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Motley Fool contributor Bernd Struben 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.