RPM undertakes $4 million capital raising
RPM Automotive Group has received $4 million in commitments from institutional and sophisticated investors via a strongly supported two-tranche share placement (placement) at an issue price of $0.072 per share.
Funds will be used to develop its strategic tyre recycling program and improve RPM’s capital structure by strengthening its balance sheet through the partial repayment of a Collins Street Value Fund convertible note issued as part of the company’s 2021 acquisition strategy.
“RPM has made significant progress in its acquisition strategy since 2021, expanding our national footprint and growing the company to where it is today, which was made possible due to the continued support of investors and funding received from Collins Street Value Fund,” said RPM CEO, Guy Nicholls (pictured above).
“RPM is now entering its next phase of growth. With the benefit of scale, The RPM team is now focused on driving margin expansion across our network. The capital raising strengthens our balance sheet and allows us to develop our tyre recycling initiative. It also builds our institutional shareholder profile.
“RPM is ideally placed to take advantage of the regulatory tailwinds supporting tyre recycling. Each year 56 million tyres are scrapped in Australia with only a small proportion recycled. We will access our existing distribution network and customer base to create recycled rubber-based products for use in multiple sectors, that could ultimately see us collecting and annually recycling 54,000 tonnes of scrap tyres within five years.”
DETAILS OF THE PLACEMENT
RPM will issue approximately 55.7 million new shares to placement participants at a price of $0.072 per new share, to raise a total of $4 million (before costs). The placement issue price represents a 15.3 per cent discount to the last closing price of $0.085.
For every new share issued to placement participants, RPM will also issue one new option. The company will apply to the ASX to have the new options quoted. The new options will have an exercise price of $0.10 and will expire on 31 August 2025. The new options will be offered only to placement participants, under a prospectus lodged on April 18, 2024. The terms of the new options are outlined in the prospectus.
The Placement will be undertaken in two tranches. Under the first tranche, 48.5 million new shares will be issued on or around April 24, 2024. This will use RPM’s existing capacity under ASX Listing Rules 7.1 and 7.1A.
Under the second tranche, a further 7.2 million New Shares will be issued as well as 55.7 million new options (the free attaching options in connection with both tranches of the placement). The issue of new shares and new options under the second tranche of the placement will be subject to shareholder approval, sought to be obtained at a general meeting of shareholders in late-May 2024.
The second tranche new shares and all the new options are expected to be issued on or around May 31, 2024. RPM is applying to have the new options quoted on the ASX at the time of their issue.
