Why is the Ecograf (ASX:EGR) share price on a wild ride today?

The Ecograf ASX: EGR) share price is on a wild ride this morning. We take a look at the company's latest capital raising announcement.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published February 12, 2021 12:36 pm AEDT

The Ecograf Ltd (ASX: EGR) share price is on a wild ride this morning. Initially down more than 6%, the share price then went up 3%. At the time of writing, the Ecograf share price is back down 3% at 97 cents.

The share price movement comes after the graphite producer and supplier reported on the completion of its capital raising.

What did Ecograf report on its capital raising?

In an announcement to the ASX this morning, Ecograf reported it has firm commitments from institutional, sophisticated and professional investors to raise $54.6 million (excluding costs).

Ecograf will issue around 91 million new fully-paid ordinary shares for 60 cents per share. That's a significant discount to the current 97 cents per share. Ecograf said that "a share purchase plan for all retail shareholders was not possible at this time".

The company plans to use the new capital to advance its battery anode material recycling programs as well as for the construction and operational commissioning of the first phase of its battery anode material purification facility in Western Australia.

Ecograf also intends to finalise the debt financing arrangements for its Epanko graphite mine.

On Monday, the company announced that GR Engineering Services Ltd (ASX: GNG) would provide the engineering design for its new battery graphite facility in Western Australia. That facility will use the EcoGraf purification technology to provide quality battery anode material products to lithium-ion battery and anode manufacturers.

According to the company, a key advantage of the EcoGra eco-friendly process is "the elimination of the use of toxic hydrofluoric acid (HF), providing customers with 'HF Free' battery products that support the increased focus on supply chain environmental, social and governance (ESG) requirements".

Ecograf share price snapshot

Though up and down for the day in morning trade, the Ecograf share price has been rocketing in 2021.

Shares really began to surge in mid-January, and year-to-date the Ecograf share price is now up an eye-popping 485%. But comparison the All Ordinaries Index (ASX: XAO) is up just over 2% in 2021.

Over the past 12 months, Ecograf shares have gained 1,144%.

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