The Medical Developments International Ltd (ASX: MVP) share price was a strong performer on Thursday.
The healthcare company’s shares closed the day a sizeable 5% higher at $7.18.
This means the Medical Developments International share price is now up 35% since the start of November.
Why did the Medical Developments International share price storm higher?
As well as getting a boost from improving investor sentiment, the Medical Developments International share price was given a lift today from the release of an announcement relating to its capital raising.
In December, the company announced a $30 million capital raising. These funds were to be used to accelerate the commercialisation of its Penthrox “green whistle” product in Europe, to strengthen the depth and breadth of its team, and to complete clinical and other studies.
Its commercialisation strategy is being led by two new appointments from biotech giant CSL Limited (ASX: CSL) – Gordon Naylor (incoming Chairman) and Brent MacGregor (CEO).
Medical Developments International’s capital raising comprised a $25 million institutional placement and a $5 million share purchase plan. Both were being undertaken at $6.50 per new share, which represented an 8.5% discount to its last close price at the time of announcement.
The institutional placement successfully completed in December and the share purchase plan was finalised today. However, due to strong demand for the latter, the company has raised more than it set out to do.
According to its release, the company received applications totalling $11.768 million from eligible shareholders. In light of this, it has elected to accept the oversubscribed amount, bringing its capital raising to a total of approximately $36.8 million.
This means approximately 1,810,412 new shares will be issued on 27 January 2021, representing approximately 2.61% of its shares on issue.
With the Medical Developments International share price closing the day at $7.14, those new shares are already in the money by just under 10%.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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