Specialist flake graphite company Tirupati Graphite has raised gross proceeds of £1.05-million by way of a private placing of 9.5-million new ordinary shares.
Optiva Securities acted as sole broker and bookrunner to the company.
The placing is conditional only on admission of the placing shares to the standard segment of the official list of the Financial Conduct Authority and to trading on the main market of the LSE, which is expected to become effective on or about January 22.
In addition to the placing, Tirupati has accepted a subscription from certain directors and members of the senior management team for 5.67-million ordinary shares of £0.025 each in the capital of the company at the placing price to be satisfied by the set off against certain amounts owing by the company to these persons in respect of past fees or remuneration in respect of their office with or engagement by the company.
To avoid incurring additional costs in respect of regulatory requirements under the UK Prospectus Regulation regime, the issue and admission of the subscription shares will be deferred until such date as the company has sufficient headroom to admit these without having to issue a prospectus, slated for about April 24.
The placing proceeds will be used for working capital to allow the company to optimise production from its existing facilities in Madagascar.
The capitalisation of outstanding dues to certain directors and senior management under the subscription will allow the full placing proceeds to be dedicated to addressing operational working capital requirements.
Tirupati is engaged in discussions with a range of prospective lenders, aiming to secure additional funding.
This funding will be used to enhance production processes, to fully maximise the company’s operational capacity to achieve a yearly production goal of 36 000 t.
Tirupati also clarifies that no capital has been raised against the convertible debt instrument as at January 16 and that the company has set it aside, focussing on expediting sources of banking finance and other non-dilutive sources of capital.
The capital raised will help the company meet its ongoing activities optimisation in the meantime, it avers.
Tirupati remains focused on increasing its production in Madagascar, with an immediate target to reach 1 500 t a month of output and expand its markets in light of growing opportunities.
“Since the beginning of the current financial year, when we had completed the developments initiated after listing in December 2020, we have continued to ramp up operations at our projects despite having limited cash resources. This placing will support the business while we continue to pursue non-dilutive capital-raising efforts.
“The pacing and subscription will enable us to focus on increasing production and sales from our Madagascar operations which has been restricted due to limited working capital availability,” says executive chairperson Shishir Poddar.
