The BPH Energy Ltd (ASX: BPH) share price was a very strong performer on Wednesday.
At one stage, the biotechnology and mineral exploration company's shares were up as much as 32% to 22.5 cents.
The BPH Energy share price ultimately gave back some of these gains and ended the day 23.5% higher at 21 cents.
Why did the BPH Energy share price rocket higher?
Investors were buying BPH Energy shares this morning after they returned from a trading half following the successful completion of a placement.
According to the release, the company has raised a total of $9 million via the placement of ~69.2 million shares to sophisticated and professional investors at a price of 13 cents per share. This placement price represents a 23.5% discount to its last close price.
The placement was led by Everblu Capital, which placed $7 million and will receive a fee of 6% of the funds raised together with 6 million share options. These options have an exercise price of 26 cents per share and an expiry date of 8 February 2023.
In addition to this, 62 Capital placed $1.5 million and will also receive 6% of the funds raised together with 1,285,714 share options.
Finally, an amount of $500,000 was placed by Grandbridge Securities, which will receive a fee of 6% of these funds raised.
BPH Energy's Managing Director, David Breeze, commented: "The Company is pleased to receive funding from a range of investors including existing and new shareholders, and others who participated in the Placement through Everblu Capital and 62 Capital."
Everblu Capital added: "We were extremely pleased to see the quality of new investors on the register. The level of demand highlights the company's current growth trajectory, and we look forward to BPH continuing to deliver to shareholders."
How will the company spend the proceeds?
Management advised that the majority of the proceeds will be used to invest in Advent Energy.
These funds will then be used by Advent to progress well planning, engineering, and environmental approvals for drilling at the Baleen drill target in the PEP11 offshore permit in NSW. Approximately $5.75 million of the capital raised is expected to be used for this purpose.
It will increase its shareholding in Advent from 22% to approximately 33%, subject to any required approvals.
In addition to this, the company intends to use $0.5 million of the proceeds to increase its shareholding in Cortical Dynamics from 16% to 18%. These funds will then help Cortical Dynamics to further develop its Brain Anesthesia Response Monitor (BARM).
