Vulcan (ASX:VUL) share price edges lower on share purchase plan update

The company released the details for its share purchase plan.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is hovering in negative territory today. This comes after the lithium developer released its share purchase plan (SPP) offer booklet to investors before market open.

At the time of writing, Vulcan shares are fetching for $13.38 apiece, down 0.52%. This means its shares have now fallen 8% in the past week alone.

Share purchase plan details

Investors are selling Vulcan shares after the company opened invitation to retail shareholders to participate in its SPP.

Following the successful $200 million institutional placement, Vulcan has extended its offer to eligible shareholders.

Under the SPP, investors can apply to buy a parcel of Vulcan shares for $13.50 per share. The same terms offered in the placement represent a discount of 15.1% on the last closing price on 13 September (before the trading halt). This is also an 8.7% discount to the volume-weighted average price over the last 10 days before the SPP was announced.

Investors can apply for a minimum application amount of $2,500 with a maximum application amount of $30,000.

Vulcan is seeking to raise a total of $20 million through the SPP. However, this can be scaled back or increased depending on the total value of the applications.

The proceeds raised from the equity raise, along with existing cash will be used towards funding a number of company initiatives. This includes the following:

  • Targeted acquisition and refurbishment of exploration equipment;
  • Targeted acquisition and upgrade of existing brownfield energy and brine infrastructure;
  • Expanded project development; and
  • Corporate costs, equity raising costs, overheads and general working capital.

The closing date for the SPP will be 13 October. The new shares will be issued on 18 October, with the following day available for trading.

Vulcan share price snapshot

Over the last 12 months, Vulcan shares have exploded into the stratosphere, posting incredible gains of 1,200%. Year-to-date has been just as impressive, up by almost 400% after investor sentiment heats up in the industry.

Based on today’s price, Vulcan commands a market capitalisation of around $1.53 billion with approximately 108.79 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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