DroneShield Limited - Major Securities Issue Announcement - 1 August 2024
DRO (DRO) Share Update July 2024 Wednesday 31st
DroneShield Limited Announces Major Securities Issue
DroneShield Limited (ASX: DRO) has announced a significant securities issue, proposing to issue 104,347,827 new fully paid ordinary shares.
Instant Summary:
- DroneShield Limited to issue 104,347,827 new fully paid ordinary shares.
- The issue price is set at AUD 1.15 per security.
- The proposed issue date is 7 August 2024.
- The securities will rank equally with existing fully paid ordinary shares.
- The placement is fully underwritten by Macquarie Capital, Bell Potter Securities, and Shaw and Partners.
- Proceeds will fund research and development and strategic acquisitions.
Details of the Securities Issue
DroneShield Limited has announced its intention to issue 104,347,827 new fully paid ordinary shares at an issue price of AUD 1.15 per security. This placement is set to raise significant capital for the company, with the proposed issue date scheduled for 7 August 2024.
The new securities will rank equally with the existing fully paid ordinary shares from the issue date. This means that investors who purchase these new shares will have the same rights and benefits as current shareholders.
Underwriting and Management
The placement is fully underwritten by Macquarie Capital (Australia) Limited, Bell Potter Securities Limited, and Shaw and Partners Limited. These firms will act as joint lead managers for the issue, ensuring that the entire placement is successful.
The underwriting fee for this placement is set at 4.5% of the gross proceeds raised. This fee will be distributed among the lead managers based on their respective proportions.
Purpose of the Issue
The funds raised from this securities issue will be used to support DroneShield's ongoing research and development efforts. Additionally, the company plans to use the capital for strategic bolt-on acquisitions, which will help accelerate the development of new products and software capabilities.
DroneShield is committed to advancing its technology and expanding its market presence. The additional funds will provide the necessary resources to achieve these goals and drive future growth.
The announcement of this significant securities issue is likely to have a notable impact on DroneShield's stock price. The infusion of capital will enable the company to invest in research and development, potentially leading to new and innovative products. This could positively influence investor sentiment and drive the stock price higher in the long term.
However, the immediate effect of issuing a large number of new shares could dilute the value of existing shares, which might cause some short-term volatility in the stock price. Investors will need to weigh the potential long-term benefits against the immediate impact of dilution.
Investor Reaction:
Analysts are likely to have mixed reactions to this announcement. On one hand, the significant capital raise demonstrates strong investor confidence and provides the company with the resources needed for growth. On the other hand, the dilution of existing shares might be a concern for some investors.
Overall, the strategic use of the funds for research and development and acquisitions is expected to be viewed positively, as it aligns with DroneShield's long-term growth objectives.
Conclusion:
Investors should closely monitor the developments following this securities issue. The successful execution of DroneShield's strategic plans will be crucial in maintaining investor confidence and driving future growth. This announcement presents both opportunities and challenges, and investors should consider their positions carefully.