Carbonxt Group Ltd (ASX: CG1) has successfully raised $1.03 million through a placement of 17,146,667 fully paid ordinary shares. The funds will support working capital and help ramp up operations at the Company’s state-of-the-art activated carbon plant in Kentucky, USA.
Details of the Placement
The placement price of $0.06 per share represents a 4.7% discount to the five-day Volume Weighted Average Price (VWAP) of CG1 shares to 19 December 2024. Investors participating in the placement will receive an unlisted two-year option, exercisable at $0.10 per share on a 1:2 basis.
The new shares will be issued on 24 December 2024, with trading expected to begin on 27 December 2024. This placement received strong support from a select group of fund managers, sophisticated investors, and high-net-worth individuals.
Building on December’s Engineering Milestone
Carbonxt’s earlier update on 18 December 2024 confirmed the successful mechanical completion of the Kentucky facility. In that update, the Company detailed that the state-of-the-art activated carbon plant positions Carbonxt to deliver high-quality environmental solutions for growing global demand.
The completion of mechanical works represented a critical engineering milestone, ensuring the facility is ready to commence production. The Company’s focus now shifts to operational ramp-up and securing sales pipelines for 2025.
Utilising Funds to Drive Growth
Carbonxt plans to deploy the capital raised for general working capital and to accelerate operations at its Kentucky facility. The funds will enable the Company to optimise production and strengthen its market presence in the activated carbon sector.
Following the recent completion of mechanical works, Carbonxt has increased its ownership stake in the Kentucky plant to 40.3%. The Company also retains the option to raise its stake further to 50% through three additional milestones.
Carbonxt highlighted its partnership with Kentucky Carbon Processing, LLC. This partnership underpins the Company’s strategic approach to expanding its operations and delivering value to shareholders. As per the operating agreement, Carbonxt has made the latest instalment to Kentucky Carbon Processing, LLC, its US-based partner for the Kentucky facility, increasing its ownership stake to 40.3%. The Company also holds the option to invest at three additional milestones to reach 50% ownership.
Strengthening Sales Pipelines
Carbonxt is actively building a robust pipeline of sales for the Kentucky plant’s output. Discussions are ongoing to secure contracts for the first two quarters of 2025, which will establish a strong foundation for revenue generation.
The December 18 update emphasised the importance of commercialising the Kentucky facility. This placement aligns with that goal, providing the necessary financial support to enhance operations and secure early-stage sales.
Comments from Leadership
Mr. Warren Murphy, Carbonxt’s Managing Director, highlighted the strategic importance of the placement:
“We are pleased to complete this Placement following the significant engineering milestone of mechanical completion. We’d like to thank our shareholders for their ongoing support and look forward to providing more updates as our commercial development plans for the Kentucky plant progress early in 2025.”
The Company’s leadership remains committed to achieving operational excellence and leveraging its Kentucky facility to capture market opportunities in the activated carbon sector.
Promising Outlook for 2025
With funds in place and the Kentucky facility nearing full operational capacity, Carbonxt is well-positioned for a strong 2025. The activated carbon plant represents a significant milestone in the Company’s growth strategy.
The announcement of the Mechanical Completion of the Kentucky Plant also reinforced the plant’s importance, noting its advanced manufacturing capabilities and potential to meet increasing market demand for activated carbon solutions.
The activated carbon market continues to expand, driven by stricter environmental regulations and rising demand for clean energy solutions. Carbonxt’s investments in cutting-edge manufacturing and strategic partnerships position it as a leader in this space.
Wrapping UP!
Carbonxt’s announcement of a $1.03 million placement builds on the Company’s announcement of achieving 40% ownership and mechanical completion of the Kentucky plant, demonstrating its commitment to growth. The successful fundraising effort reflects investor confidence in Carbonxt’s vision and operational capabilities.
As Carbonxt progresses with its commercialisation plans, shareholders can expect continued updates on its achievements. The Company’s focus on operational excellence, market expansion, and shareholder value underpins its long-term growth potential.
By leveraging the mechanical completion milestone and building a robust sales pipeline, Carbonxt aims to achieve significant operational and financial milestones in 2025.
