London-listed potash development company Emmerson has raised £850 000, before expenses, through an oversubscribed placing and subscription of 130.77-million new ordinary shares of no-par value each in the share capital of the company at a price of 0.65p a share and 43.59-million attaching warrants with an exercise price of 3p a share and a term of seven years from the date of issuance.

The fundraising was led by Shard Capital Partners.

Emmerson says the net proceeds of the fundraising will primarily support the company as it looks at its various options with respect to the dispute with the Moroccan government.

Emmerson in late October informed shareholders that the Moroccan authorities had indicated that the environmental- and social-impact assessment approval for its flagship Khemisset potash project would not be granted, bringing the project to a halt.

After attempts to discuss the matter with the authorities, Emmerson on November 1 said it would lodge an investment dispute and pursue international arbitration.

"The government of the Kingdom of Morocco has failed to respond to our notice of dispute. Accordingly, working with our specialist arbitration legal team, Boies Schiller Flexner, we have presented our case to funders of potential arbitration claims and have received significant interest.

"As we expected, the merits present extremely well with these litigation experts, and we are aiming to close our funding agreement as soon as we possibly can. Given the complete lack of engagement, we expect to request arbitration via International Centre for Settlement of Investment Disputes.

"A core group of investors, which were involved in the recent, successful, GreenX arbitration victory over the Polish government, are taking up a position in this capital raise. These investors are well versed in international arbitration and have worked extensively with our legal counsel. They share our view on the strength of our case,” says Locke.

It is intended that the net proceeds of the fundraising will principally be used for general and administrative expenses including redundancy costs, core listing expenses, legal fees associated with the dispute with Morocco and base remuneration for the key witnesses in our expected arbitration.

To assist with its ongoing arbitration, the company says it has engaged with several groups linked with the successful GreenX claim to assist from a commercial standpoint and with various strategic matters.

The company will issue these advisers, or their nominees, a total of 17-million options, on the same terms as the warrants for the capital raise, to align and incentivise their continued involvement with Emmerson.