The Serko Ltd (ASX: SKO) share price has returned from its trading halt and is zooming higher on Friday.
At the time of writing the travel and expense technology solution provider's shares are up 6.5% to $4.44.
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Why is the Serko share price zooming higher?
Investors have been buying Serko's shares today after it announced the successful completion of an upsized institutional placement.
According to the release, Serko's NZ$45 million placement was oversubscribed at NZ$4.55 per new share. This resulted in the company deciding to increase the size of the placement to NZ$47.5 million.
Interestingly, demand was so strong for the placement that Serko was able to command a premium for the shares. The placement price of NZ$4.55 was actually a 0.9% premium to its last close price of NZ$4.51.
The company will now push ahead with its share purchase plan, which is aiming to raise an additional NZ$10 million from retail investors.
Why is Serko raising funds?
Serko is raising the funds to to accelerate the development and rollout of its technology to support its Travel Management Company and reseller partners. The funds will also be used to progressively scale up and bring the power of Zeno to the global market.
Serko's CEO, Darrin Grafton, commented: "In recent months, we have received inbound demand from these organisations as they consider, plan and request accelerated timetables to onboard new customers, deliver new features and expand existing partnerships. This demand has exceeded our expectations and is highlighting increased opportunities from a changing travel industry."
"Serko's priority is to ensure it has the resource and capacity to execute on its strategic priorities, positioning the company for growth when business travel normalises and to capitalise on opportunities arising from changes to the travel industry," he added.
