Written by 11:46 am Australia, Carbonxt, SLIDER

Investor Insights: Carbonxt Group’s Pro-Rata Entitlement Offer and Facility Development Plans

Carbonxt
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Carbonxt Group Limited (ASX: CG1) (“Carbonxt” or the “Company”), headquartered in Gainesville, Florida, United States, is a clean-tech company. The Company is developing and selling activated carbon products, including Powdered Activated Carbon (PAC), AC pellets, and custom activated carbon technologies. These products find applications in various industries, such as industrial air purification, wastewater treatment, liquid phase markets, coal-fired power plants, cement plants, industrial boilers and incinerators, and potable water.

Carbonxt Group Ltd (CG1) has officially launched a non-renounceable pro-rata entitlement offer, offering one new share at AUD 0.06 for every nine shares held at the record date. The initiative aims to raise around AUD 1.84 million before costs, with the offer open until 5:00 pm (AEDT) on January 3rd, 2024, subject to any extensions. Eligible shareholders have received the offer document and acceptance form.

About Carbonxt Group’s Entitlement Offer

The Company’s Managing Director, Mr Warren Murphy, and Chairman, Mr Matthew Driscoll, jointly extend an invitation on behalf of Carbonxt Group Limited to partake in the recently disclosed 1 for 9 pro-rata non-renounceable entitlement offer.

Overview of the Entitlement Offer

According to the announcement, Carbonxt Group Ltd (CG1) is extending a significant opportunity for eligible shareholders through a fully underwritten, non-renounceable rights issue. This initiative by the Company’s Managing Director and the board members of Carbonxt offers 1 new share for every 9 existing shares held as of the Record Date on Friday, December 8th, 2023, at a favourable issue price of AUD 0.06 per new share. Eligible shareholders receive a personalised Entitlement and Acceptance Form specifying the number of new shares entitled.

Shareholders can choose whether to take all of their entitlements or only part of them, and they can also request additional shares (Additional Shares) at the Company’s discretion after the Entitlement Offer closes. The offer, open from 10:00 am (Sydney time) on December 12th, 2023, to 5:00 pm (Sydney time) on January 3rd, 2024, is fully underwritten by the Underwriter (Chaleyer Holdings Pty Ltd).

Figure 1: Summary of Carbonxt Group Limited’s Recently Announced Entitlement Offer

Figure 2: Key Dates for Carbonxt Group Limited’s Recently Announced Entitlement Offer

Entitlement Offer as Capital Raise Initiatives

Carbonxt Group Limited recently announced a comprehensive capital-raising strategy comprising two components:

  • Entitlement Offer: Aiming to raise AUD 1,835,326, this initiative involves a non-renounceable pro-rata rights issue for existing shareholders.
  • Placement: Carbonxt Group Ltd (CG1) completed an AUD 600,000 placement of roughly 10,000,000 new fully paid ordinary securities in CG1 to institutional investors and plans a subsequent AUD 500,000 placement of approximately 8,333,333 new fully paid common securities in CG1 to Pure Asset Management. In total, the Placement is expected to raise AUD 1,100,000.

Development Objective of the Carbonxt’s Kentucky Facility

The Company aims to secure a maximum of AUD 2,935,326 by combining the Entitlement Offer and Placement. With an initial 10,000 tons per annum capacity, this facility is set to manufacture Activated Carbon pellets and granular Activated Carbon. The Company anticipates completing the pellet facility in the third quarter of the financial year ending June 30th, 2024, with a total investment of USD 10 million in NewCarbon Processing, LLC. This investment is staged, with the Company contributing USD 5.5 million to date for a 35.48% ownership percentage, intending to invest a further USD 4.5 million over the next 18 months to move to a 50% ownership position. The Company anticipates completing the pellet facility in the third quarter of the financial year ending June 30th, 2024, positioning itself for a significant market opportunity in the U.S. water and wastewater treatment industry.

Figure 3: Allocation of the funds raised through the Entitlement Offer (via payment of the Offer Price)

About Carbonxt Groups’s Managing Director, Mr Warren Murphy

Mr Warren Murphy, Managing Director of Carbonxt Group Ltd, has spearheaded numerous acquisitions and financings within the energy, resources, and infrastructure sectors. As the Co-Head of the Australian Infrastructure and Project Finance Group and Head of Energy at Babcock & Brown, he developed over 2,000 MW of Greenfield’s power stations and acquired 3,000 MW of generation. Notably, Mr Warren Murphy played a crucial role in establishing Infigen Energy and served as a director from inception until June 2009, showcasing his leadership in the industry. He also served as a director for ASX-listed Alinta Limited and Sydney Gas Limited.

Figure 4: Mr Warren Murphy, Carbonxt Group Limited’s Managing Director

Investor’s Outlook

  • For investors, Carbonxt Group Ltd’s (CG1) non-renounceable pro-rata entitlement offer and concurrent placements represent a strategic capital-raising effort. This funding supports the development of a Kentucky facility, enabling the manufacturing of Activated Carbon products. Successful investment contributes to the Company’s growth, potential market expansion, and enhanced competitiveness in the water and wastewater treatment industry
  • The successful AUD 0.6 million placement by Carbonxt Group Ltd, along with an upcoming AUD 0.5 million placement to Pure Asset Management, demonstrates strong investor support. These funds contribute to the AUD 2.94 million capital raise, providing working capital for the Kentucky Facility’s development. Investors can benefit from enhanced company capitalisation and strategic execution capabilities
  • As of December 12th, 2023, the share price of Carbonxt Group stood at AUD 0.065 per share, with a 52-week range of AUD 0.045 to AUD 0.099
  • As of December 12th, 2023, the Company’s market capitalisation was AUD 17.894 million
  • The Company has issued 275.3 million shares as of December 12th, 2023

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