The ,Propel Funeral Partners Ltd (ASX: PFP) share price is sinking in morning trade, down 6.8% to $4.12 per share.
Below we take a look at the company's capital raising announcement.
What capital raising was announced?
The Propel Funeral share price is dropping after the company reported it had completed a roughly $52.2 million institutional placement.
Some 12.25 million new shares will be issued to new and existing shareholders for $4.10 per share. Even after today's 6.8% retreat, that's still 2 cents below the current Propel Funeral share price.
Atop the institutional placement, the company plans to raise up to $10 million more via a share purchase plan (SPP). The SPP is available to existing eligible shareholders who can subscribe for up to $30,000 worth of new shares. Propel expects the SPP offer period will open next week Wednesday, 27 October.
The company plans to use the proceeds of the placement and SPP to pay down debt and increase its available funding capacity to pursue further growth initiatives and acquisitions.
Commenting on the capital raising, Propel's managing director Albin Kurti said:
We are delighted by the support received from Propel's existing institutional shareholders and to be welcoming new institutional investors, who will broaden Propel's share register. We are also pleased to offer all eligible shareholders the ability to participate in the share offering via the SPP.
We believe this is the right time to further strengthen our balance sheet, as the company seeks to continue to execute on its acquisition led growth strategy in what is a highly fragmented industry.
Propel expects settlement of the placement to occur this Friday, 22 October.
Propel Funeral share price snapshot
Despite today's dip, the Propel Funeral share price has been a stellar performer in 2021, up 46%. That well outpaces the 11% gains posted by the The All Ordinaries Index (ASX: XAO) year-to-date.
Over the past month, Propel's shares are up 6%.
