Lark Distilling Co. Completes $6.5 Million Institutional Placement to Boost Growth
LARK DISTILLING CO. LTD (LRK) Share Update July 2024 Monday 29th
Lark Distilling Completes $6.5 Million Institutional Placement
Lark Distilling Co. Limited (ASX: LRK) has announced the successful completion of a $6.5 million institutional placement, part of a larger $22.5 million equity raising effort aimed at accelerating the company's growth and export strategy.
Instant Summary:
- Lark raises $6.5 million from institutional investors.
- New shares issued at $0.85 each, a 1.7% discount to the last close price.
- Funds to support brand investment and export strategy.
- Conditional placement of $15 million to Lark Directors pending shareholder approval.
- Share Purchase Plan (SPP) to raise up to $1 million from eligible shareholders.
Successful Institutional Placement
Lark Distilling Co. Limited (ASX: LRK) has successfully completed the institutional placement component of its planned ~$22.5 million equity raising. The placement raised $6.5 million, with strong demand from both existing and new investors. Shares were issued at $0.85 each, representing a 1.7% discount to the last close price of $0.865 and a 3.8% premium to the 20-day VWAP of $0.82.
CEO's Statement
Lark's CEO, Satya Sharma, expressed satisfaction with the support from shareholders, emphasizing the company's commitment to building a globally recognized luxury brand. The funds will provide balance sheet flexibility to invest in the Lark brand and facilities, driving the export strategy and accelerating growth.
Conditional Placement
Lark also plans a $15 million conditional placement to Lark Directors, subject to shareholder approval at an Extraordinary General Meeting (EGM). Seppeltsfield Wines Pty Ltd, associated with Warren Randall, has committed to $14.5 million, while Domenic Panaccio and David Dearie have each committed to $0.25 million. This placement will result in approximately 17.6 million new shares, representing about 23.3% of Lark's existing issued capital.
Share Purchase Plan (SPP)
In addition, Lark will offer a Share Purchase Plan (SPP) to eligible shareholders, allowing them to subscribe for up to $30,000 of new shares at the placement price of $0.85, free of brokerage or transaction costs. The SPP aims to raise up to $1 million, with the right to accept oversubscriptions or scale back applications at Lark's discretion. New shares issued under the SPP will rank equally with existing shares.
Timetable
The key dates for the equity raising include the resumption of trading on 30 July 2024, settlement of the institutional placement on 1 August 2024, and the opening of the SPP on 5 August 2024. The SPP offer will close on 20 August 2024, with allotment and normal trading of new shares starting on 27 August 2024. The EGM to approve the conditional placement is expected in late August or early September, with settlement and trading of new shares in early September.
The successful institutional placement and planned conditional placement are positive indicators of investor confidence in Lark Distilling's growth strategy. The funds raised will enhance the company's ability to invest in brand development and export initiatives, potentially boosting its market position. However, the issuance of new shares will dilute existing shareholders' equity, which may impact the stock price in the short term.
Investor Reaction:
Analysts are likely to view the successful placement as a strong vote of confidence in Lark's strategic direction. The involvement of major shareholders and the commitment from Seppeltsfield Wines Pty Ltd further validate the company's growth potential. However, some investors may be cautious about the dilution effect of the new shares.
Conclusion:
Investors should monitor the upcoming EGM for the approval of the conditional placement and the progress of the SPP. Lark Distilling's strategic investments in brand and export growth could yield significant long-term benefits, making it a stock to watch closely.