Galan Lithium Limited Equity Raising and Entitlement Offer - September 2024
GALAN LITHIUM LIMITED (GLN) Share Update September 2024 Tuesday 17th
Galan Lithium Announces $25 Million Equity Raising and Entitlement Offer
Galan Lithium Limited (ASX: GLN) has announced a significant equity raising initiative, aiming to raise approximately $25 million through an entitlement offer and placement to institutional, sophisticated, and professional investors.
Instant Summary:
- Galan Lithium to raise $25 million through equity raising.
- Entitlement Offer opens on 18 September 2024 and closes on 3 October 2024.
- Issue price for new shares set at $0.105.
- Existing shareholders can participate on the same terms as institutional investors.
- Proceeds to fund Hombre Muerto West lithium brine project and other corporate needs.
Equity Raising Details
On 10 September 2024, Galan Lithium Limited (ASX: GLN) announced its plan to raise approximately $25 million through an equity raising initiative. This initiative includes a placement to institutional, sophisticated, and professional investors, as well as a pro-rata non-renounceable entitlement offer to eligible shareholders.
The entitlement offer allows existing shareholders to subscribe for new fully paid ordinary shares in Galan at an issue price of $0.105 per share. The offer is on the basis of one new share for every four existing shares held as of the record date, 13 September 2024.
Participation Details
The entitlement offer opens on 18 September 2024 and is expected to close on 3 October 2024. Eligible shareholders are those whose details appear on the company's register as of the record date and whose registered address is in Australia, New Zealand, or an approved foreign jurisdiction, including Singapore and Hong Kong.
The offer is non-renounceable, meaning shareholders cannot trade their entitlements on the ASX or otherwise transfer them. If shareholders do not take up their entitlements in full, they will not receive any value for the part of the entitlement they do not take up.
Shortfall Offer
Eligible shareholders may also apply for more than their entitlement from any pool of new shares not taken up under the entitlement offer, subject to such applications being received by the closing date. The issue price for new shares under the shortfall offer will be the same as the entitlement offer, $0.105 per share.
Use of Proceeds
The proceeds from the equity raising will be used for the further development of the Hombre Muerto West lithium brine project in Argentina, corporate overheads, costs of the entitlement offer, and working capital.
Key Dates
The key dates for the entitlement offer are as follows:
- Record Date: 5.00 pm (Perth time) on Friday, 13 September 2024
- Entitlement Offer Opening Date: Wednesday, 18 September 2024
- Entitlement Offer Closing Date: 5.00 pm (Perth time) on Thursday, 3 October 2024
- Announcement of Results and Issue of New Shares: Thursday, 10 October 2024
* The above timetable is indicative only and subject to change.
The equity raising and entitlement offer are expected to provide Galan Lithium with the necessary funds to advance its key projects, particularly the Hombre Muerto West lithium brine project. The discounted issue price of $0.105 per share represents an 8.7% discount to the last trading price and a 16.1% discount to the 5-day VWAP, which may attract strong investor interest.
However, the non-renounceable nature of the offer means that shareholders who do not participate will experience dilution of their holdings. The successful raising of $25 million will be a positive step for Galan Lithium, potentially boosting its stock price as the market reacts to the company's strengthened financial position.
Investor Reaction:
Analysts are likely to view the equity raising and entitlement offer positively, given the potential for significant project advancement and the attractive discount on the new shares. However, some investors may be cautious about the dilution effect on their existing holdings.
Conclusion:
Investors should consider participating in the entitlement offer to avoid dilution and support the company's growth initiatives. Monitoring the progress of the Hombre Muerto West project and Galan Lithium's strategic use of the raised funds will be crucial in assessing the long-term benefits of this equity raising.