Aim-listed Richland’s share price on Monday fell about 26% to 0.11p apiece after it announced an equity raising of about £150 000.
The company placed 105-million new common shares with certain new investors at an issue price of 0.10p apiece.
Further, the company announced a subscription for a further 45-million new common shares by new investors, also at the issue price.
The placing was arranged through Peterhouse Capital, which, as payment, will receive 5% of the gross proceeds of the placing. One per cent of the commission will be settled by issue of 5.7-million shares to Peterhouse. Additionally, Peterhouse had agreed that its initial six monthly retainer fee for 2020 will be settled by the issue of a further 10-million new common shares at the issue price.
The placing shares and subscription shares represent about 14.6% of the company’s enlarged issued share capital.
The net proceeds from the equity fundraising will be used to provide Richland with additional general working capital and to satisfy the costs associated with a reverse takeover transaction. The company was seeking out a reverse takeover suitor.
The Australian sapphire and gemstone company had sold its Capricorn mine, in Queensland, earlier this month; Richland had therefore become a “cash shell” and had been required to make an acquisition to constitute a reverse takeover.
The company could seek to become an investing company, which required the raising of at least £6-million and publication of an admission document.
In the event that Richland could not complete a reverse takeover within a six-month period or seek re-admission to trading on the Aim as an investing company, Richland’s shares would be suspended from trading. Should the company not complete a re-admission transaction within a further six month period, the company’s shares would be cancelled.