Vulcan Energy Resources Ltd has completed the Vulcan Energy retail entitlement offer successfully, thereby making its financial position stronger. The completion is a significant event in the Company’s overall equity raising strategy.
The result of the offer was backed by strong participation from eligible retail shareholders. This is after the previous institutional commitments that were a part of the total capital raising. The Company mentioned that the outcome of funding gives it the strength to pursue its lithium ambitions in Europe.
The retail component was included in a pro-rata accelerated non-renounceable entitlement offer. Vulcan Energy Resources Ltd reported that the offer managed to draw a lot of interest from its existing shareholders. The result is a confirmation of the Company’s long-term project development plans’ continued support.
Vulcan completes retail entitlement offer, strengthening financial position
What Is The Vulcan Energy Retail Entitlement Offer?
The structure of the Vulcan Energy retail entitlement offer was closely looked at by investors. Eligible shareholders were offered one new fully paid ordinary share for every 1.128 shares they owned. The price for the new shares was A$4.00 per share.
With this structure, retail investors had the same access as the institutional participants. The retail entitlement offer was part of a larger equity raising that aimed to gather around €545 million, or about A$973 million.
The funds will be allocated to a complete financing plan that would eventually support all of Vulcan’s major projects. The Company has stated that all the applications from the retail offer that were eligible were accepted.
Why Did Vulcan Energy Raise New Capital?
Vulcan Energy Resources Ltd has managed to raise capital to the tune of €2.2 billion (about A$3.9 billion) to pay for Phase One of its Lionheart lithium and renewable energy project in Germany, which was the primary goal of the Company.
The Company’s management made it clear that the whole funding could easily accommodate building, commissioning, and operating in the very early stage. They’ve announced that the equity raising is in addition to the debt they had secured already and the strategic investments.
The method shows that Vulcan is determined to lessen the risk related to project delivery, while at the same time keeping the balance sheet strong. The ground made through funding puts the Company in a position of certainty as far as the major development milestones are concerned.
Vulcan secures €2.2 billion to fund Lionheart Phase One
How Does This Affect Vulcan Energy Resources ASX Investors?
Vulcan Energy Resources ASX shareholders who keep an eye on the firm’s activities have been given a clearer view of the Company’s capital structure with the fulfilment of the retail offer.
The retail portion was set as a consequence of an institutional entitlement offer and placement that gathered around €148 million, which is approximately A$263 million. The new stocks that have been created through the deal are supposed to start regular trading in no time. The short-term market volatility due to the capital raising has been reflected in the market sentiment.
Nevertheless, the Company’s project fundamentals and strategic positioning keep long-term investors’ interest. The presence of both retail and institutional investors is a signal that confidence regarding the growth outlook of Vulcan has increased.
What Does Full Funding Mean For Phase One Lionheart?
The retail entitlement offer of Vulcan Energy has been a great success, and it has provided the full amount of funding needed for the Lionheart Project, Phase One. Thus, Vulcan can start to perform planning and procurement activities for engineering and construction.
The Project is aimed at producing battery-grade lithium hydroxide out of geothermal brine. Lionheart has been described as an operation that is taking place on a low-carbon lithium site that is getting the power from renewable energy sources.
Battery manufacturers in Europe will be getting their lithium from Vulcan, which has been the Company’s goal. The funding that has been secured will allow the Company to face execution and risk associated with financing rather than financing.
Vulcan retail offer fully funds Lionheart Phase One development
What Comes Next For Vulcan Energy Resources Ltd?
Vulcan Energy Resources Ltd is now moving towards the final investment decision milestones. The Company intends to prepare for the construction of the plant while maintaining good relationships with the stakeholders.
The management has not only confirmed their dedication to the careful handling of capital but has also pledged to keep the communication with the market open. As the global market for battery materials continues to expand, the Company’s progress will be monitored closely.
The lithium and renewable energy model of the Company puts it into a fast-changing energy transition landscape. Investors and industry participants will keep a close watch as the development of Phase One progresses.
Also Read: Vulcan Energy Locks Down $710 Million as Major Investors Back European Lithium Push
FAQs
Q1: What was the issue price in the Vulcan Energy retail entitlement offer?
A1: The issue price was set at A$4.00 per new fully paid ordinary share.
Q2: Who was eligible to participate in the retail entitlement offer?
A2: Eligible shareholders on the record date could participate on a pro-rata basis.
Q3: How much funding did the overall equity raising target?
A3: The equity raising targeted approximately €545 million, or around A$973 million.
Q4: What will the funds be used for?
A4: The funds will support full funding of Phase One of the Lionheart lithium project.
