The IDP Education Ltd (ASX: IEL) share price has returned from its suspension and rocketed higher.
At the time of writing the language testing and student placement company's shares are up 18% to $13.63.
Why is the IDP Education share price rocketing higher?
This morning IDP Education's shares returned from their suspension following the successful completion of its fully underwritten institutional placement.
The company was aiming to raise $175 million from institutional investors, but due to significant demand received from domestic and global investors, the placement was increased to $225 million. These funds were raised at a price of $10.65 per new share. This represents a 7.9% discount to its last close price.
Why did IDP Education raise funds?
IDP Education launched the institutional placement in order to enhance its balance sheet strength, financial flexibility, and liquidity during the COVID-19 crisis.
Its operations have been impacted significantly due to testing centre suspensions, travel bans and restrictions, and a 21-day lockdown in the key India market.
The company's chairman, Peter Polson, was very pleased with the outcome of the placement.
He said: "We are very pleased with the strong level of support from our shareholders, as well as other investors. The prudent operational and capital measures we announced will ensure that we are well placed to navigate through the current period of uncertainty. We are well positioned to capture market opportunity and continue to deliver value for our customers and shareholders."
Share purchase plan.
IDP Education will now push ahead with its share purchase plan, which aims to raise a further $15 million.
Eligible shareholders have the opportunity to apply for up to $30,000 of new shares without incurring brokerage or transaction costs.
This will be conducted at the lower of either the placement price of $10.65 or a 2% discount to the 5-day VWAP of its shares up to, and including, the closing date of May 4.
To be eligible, you needed to be a shareholder on Tuesday March 31.
IDP Education is just one of a number of shares raising funds this month.
Other include online travel agent Webjet Limited (ASX: WEB), which is seeking to raise $275 million from investors, and data centre operator NEXTDC Ltd (ASX: NXT), which has just launched a $672 million equity raising.
