Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF) has opened an entitlement offer with the aim of raising up to A$5.2 million as a follow-up to the successful institutional placement which raised A$15 million.
Under the offer announced on April 29, 2024, eligible shareholders can apply to receive one fully paid ordinary share in the company for every 40 fully paid ordinary shares held at 7pm (Sydney time) on the record date of May 2, 2024.
The issue price is A$1.16 for each entitlement offer share, which is the same offer price as the placement.
READ: Australian Strategic Materials raises $15 million in institutional placement; eyes $5.2 million in entitlement offer
Eligible shareholders whose application under offer is successful will also be issued one free attaching option for every one entitlement offer share issued.
Use of funds
Funds will be used to further the company's progression towards a final investment decision for the Dubbo Project by meeting necessary co-commitments for government funding.
Major shareholders and directors have already shown their support, with pre-commitments amounting to around $1.4 million, led by chair and major shareholder Ian Gandel through Abbotsleigh Pty Ltd.
Offer details
All eligible shareholders at the record date with a registered address in Australia or New Zealand are eligible to participate in the entitlement offer.
Eligible shareholders may take up their entitlement to acquire new ASM shares in full, in part, or not at all.
This offer is non-renounceable, meaning eligible shareholders who do not wish to subscribe for some, or all of their entitlement may not sell or transfer their rights. The offer is not underwritten.
A Letter of Access detailing how to access the Entitlement Offer Prospectus, which sets out the terms of the entitlement offer, and the entitlement acceptance form has now been dispatched.
Shortfall shares
ASM reserves the right to place the balance of any new shares not applied for under the entitlement offer, shortfall shares, at the absolute discretion of the board, within three months of the close of the offer in accordance with ASX Listing Rule 7.2 (Exception 3).
Any shortfall shares would be offered at a price not less than the offer price as offered under the entitlement offer.
The board may, in its absolute discretion, invite other new investors and/or existing ASM shareholders to apply for shortfall shares.
If there are shortfall shares and the number of such shares is insufficient to satisfy applications, the board's decision as to the number of shortfall shares to be issued, and to whom, is final.