Vulcan Energy shares dive on discounted capital raise
Make us a preferred source
Make us a preferred source on Google
The news: Shares in Vulcan Energy tanked in early trading on the ASX after the lithium and renewable energy producer completed a discounted capital raise and provisionally secured $819 million worth of debt financing from the European Investment Bank (EIB).
The numbers: Vulcan shares were down 12.1% to $5.84 by 11:10am AEDT, having more than doubled in value since January.
The company confirmed the completion of an institutional placement, and concurrent strategic placement, that raised $164 million at an offer price of $5.85 per share. This was an 11.9% discount to Vulcan's last close at $6.64 on Tuesday.
The capital raise, announced on Thursday, will be followed up with a $20 million share purchase plan, with funds from both going towards the first phase of Vulcan's Lionheart project in Germany.
Meanwhile, Vulcan said that the EIB board has approved its participation in the company's debt financing process, with a potential contribution of around $819 million. Vulcan has already received a $196 million commitment from Export Finance Australia, as well as an "indication of strong support" from the export credit agencies of Canada, France and Italy.
The context: Vulcan's Lionheart project is expected to be the world's first integrated renewable energy and lithium project, based in Germany's Upper Rhine Valley, aiming to decarbonise the lithium supply chain for electric vehicles while supplying renewable heat and power locally.
The EIB is the lending arm of the European Union and one of the largest climate finance providers globally.
What they said: "Approval by the EIB to participate in Vulcan's debt financing process strongly reflects the significance of this project in Germany and broader Europe," said Vulcan's chief financial officer Felicity Gooding.
"Our aim of building a fully domestic, sustainable lithium supply chain in Europe, for Europe, ultimately requires the support of financiers such as the EIB, and confirmation of its participation is a welcome and timely development."
The sources: ASX announcement, ASX announcement
