- Atrum Coal (ATU) launches a $3.2 million non-renounceable institutional and retail entitlement offer
- The underwritten offer allows eligible shareholders to subscribe for two new shares for every 11 shares already held at a price of 3 cents
- The issue price marks a 42.3 per cent discount to the last closing price on July 30
- The money will go towards stakeholder consultations, environmental studies, general working capital and offer costs
- Atrum Coal remains in a trading halt with shares last trading at 5.2 cents on Friday, July 30
Atrum Coal (ATU) has inked its plans to raise $3.2 million through an entitlement offer.
The company entered a trading halt prior to the market opening and shortly afterwards it announced the full details.
Eligible shareholders will be given the opportunity to participate in the underwritten accelerated non-renounceable entitlement offer, which will issue two new shares for every 11 existing shares held.
The issue price of 3 cents represents a 42.3 per cent discount to the last closing price on July 30 and a 20.9 per cent discount to the 30-day volume-weighted average price.
The entitlement offer is made up of an institutional and retail component with the institutional portion expected to close on August 3. The retail component will be open from August 9 until August 30.
The retail entitlement offer will include a $500,000 top-up facility which will invite eligible retail shareholders who take up their entitlement in full to apply for additional shares that weren't taken up by the closing date.
Positively for the company, its largest shareholder, Warburton, which owns a 19.6 per cent interest, has agreed to take up its entitlement and provide sub underwriting for a commitment of $2 million.
Atrum Coal will use the $3.2 million for continuing stakeholder consultations and public campaigns, baseline environment studies, general working capital and costs of the entitlement offer.
Earlier this year, Atrum's Elan Coking Coal Project was put on hold after Alberta's 1976 coal policy was reinstated.
Subsequently, this led to the prohibiting of all future coal exploration approvals on particular land types. Pre-approved site work, such as baseline environmental studies, could continue at the project however Atrum's drilling plans had to be suspended.
Managing Director and CEO Andy Caruso commented on the raise and the policy reinstatement
"The Elan Coking Coal Project is a world-class hard coking coal resource and we're raising funds to ensure that we can both allocate the appropriate resources to community engagement, stakeholder consultation and the independent Coal Policy Committee Process," Mr Caruso said.
He added the company also wanted to be "in a position to recommence study work and site-based activity rapidly for the Elan project should that opportunity be available post the current process.
"While the current Albertan consultation process in pursuit of a new, modern coal policy has created uncertainty, we are optimistic that in the end it will actually deliver greater metallurgical coal development certainty than might have existed previously."
Atrum Coal remains in a trading halt with shares last trading at 5.2 cents on Friday, July 30.