The Australian Primary Hemp Ltd (ASX: APH) share price is rocketing higher today.
This comes after the company announced it has secured firm commitments through a placement to fund its growth strategy.
At the time of writing, the company's shares are up an astonishing 16% to 44 cents.
It's worth noting that during the opening minutes of trade, the Australian Primary Hemp share price reached a multi-year high of 62 cents.
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Placement in detail
According to the release, Australian Primary Hemp welcomed the firm commitments to raise roughly $5.2 million through a strategic placement with an offer price of 32 cents per share price.
Under the placement, approximately 16 million ordinary shares will be issued with an offer price of 32 cents per share. This represents a steep discount of 36% on the current Australian Primary Hemp share price.
The company noted that the placement received strong support from new investors, existing institutional investors, and high-net worth investors.
Monies raised from the placement will complement its proposed $1 million share purchase plan. Together, the funds will be used to assist Australian Primary Hemp in driving its growth strategy and ongoing transformation process.
This included investment in capital equipment purchases, marketing and sales costs, general capital working requirements, and strengthening the balance sheet.
Australian Primary Hemp revealed that it is seeking to transition its business into a branded, value-added health and wellness company.
To be an eligible shareholder for the share purchase plan, you needed to be on the company's register by last night.
For those who were lucky enough, the offer period of the share purchase plan closes on February 10, 2021.
Management commentary
Australian Primary Hemp managing director and CEO, Mr. Neale Joseph, touched on the placement, saying:
We are highly encouraged by the level of support investors have shown for APH.
There are significant tailwinds and growing consumer demand for high-quality, plant-based 'superfoods', particularly hemp-based products. This growing demand is reflected in the retail distribution agreement we have recently secured with Woolworths and 7-Eleven, which will see our Mt. Elephant brand of health and wellness products made available to consumers across Australia.
About the Australian Primary Hemp share price
The Australian Primary Hemp share price has performed quite well over the last 12 months, gaining over 170%.
Its shares took a tumble during COVID-19 where they were swapping hands for as little as 4.9 cents in March.
However, since then, the Australian Primary Hemp share price took a turn to march higher over the last 9 months.
