CFOAM (ASX:CFO) to raise $14.4M via placement

• CFOAM (CFM) has received binding commitments to raise $14.4 million via a share placement
• Funds are set to go towards the CFOAM business, investment in Innovaero Technologies and for general working capital
• CFOAM products are an inorganic carbon material manufactured from coal, pitch or lignin feedstock designed to meet growing demand for ultra-high performance engineering materials in various markets
• The two-tranche placement will comprise the issue of 258.7 million new shares at 1.6 cents each, representing a 22-per-cent discount to the 15-day volume-weighted average price
• Shares are trading in the grey at 1.8 cents each

CFOAM (CFM) has received binding commitments to raise $14.4 million via a share placement.

The company entered a trading halt on Monday in anticipation of the raise, today announcing it will put the funds towards the CFOAM business, investment
in Innovaero Technologies and for general working capital.

The raise will involve a two-tranche placement of around 258.7 million new shares at 1.6 cents each, representing a 22-per-cent discount to the 15-day volume-weighted average price.

The first tranche will issue 118,768,127 shares expected on May 17, with the remaining 140 million shares proposed to be issued on July 7, subject to shareholder approval at a general meeting which the company plans to hold soon.

A chunk of the potential funds raised will go towards the CFOAM business, the products of which are touted as an inorganic carbon material manufactured from coal, pitch or lignin feedstock.

The business was designed to meet growing demand for ultra-high performance engineering materials in the military, industrial, aerospace and commercial product markets.

The company expects additional markets such as automotive applications for energy absorption and fire resistance will become significant to the business over time.

CFOAM also plans to commit up to $1.9 million towards Innovaero’s current raise of up to $6 million via a convertible note.

With a 10.24 per cent interest in the aeronautical product development and manufacturing company, CFOAM said that through the investment it will maintain and increase the interest when converted to equity.

Further, Innovaero is considering an ASX listing later this year and the conversion is subject to a 30-per-cent discount to an IPO valuation.

Consequently, CFOAM’s interest would increase up to 17 per cent, subject to the valuation conversion. CFOAM also holds an anti-dilution right for the company for a period ending in December.

The company entered a trading halt on Monday which has now lifted.

Shares have traded in the grey at 1.8 cents since May 7.