Global Energy (ASX:GEV) is raising $10m for its green hydrogen project. But investors aren't impressed

The company's shares are free-falling on Thursday…

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The Global Energy Ventures Ltd (ASX: GEV) share price has come out of a trading halt today. This follows an update in regards to its capital raising efforts from the energy solutions company.

However, the news has not been well received by investors. At the time of writing, Global Energy shares are down a sizeable 9.68% to 14 cents. For context, the All Ordinaries Index (ASX: XAO) is down 0.71% to 7,682 points.

Successful placement

In a statement to the ASX, Global Energy advised it has successfully completed its institutional placement.

The company received firm commitments from both new and existing institutional, sophisticated, and professional investors to raise $10 million (before costs).

The placement will see 80 million new ordinary shares issued at a price of 12.5 cents apiece. This represents a 24% discount on the last closing price on 8 November, and a 10.5% discount on the 15-day volume-weighted average price.

The funds acquired from the placement will be used to accelerate the development of the Tiwi green hydrogen project in the Northern Territory. This includes:

  • Tiwi green hydrogen project feasibility study;
  • Ongoing engineering and approvals for the pilot compressed hydrogen ship;
  • Administration costs; and
  • General working capital.

The newly created shares are expected to be allotted and issued on 17 November.

In addition to the placement, Global Energy will undertake a non-underwritten share purchase plan (SPP), raising another $2 million. The terms will be the same as offered in the institutional placement.

The SPP will open on 22 November, with settlement on 13 December.

Global Energy managing director and CEO Martin Carolan commented:

The company's launch into the upstream green hydrogen production with the Tiwi green hydrogen project provides a unique investment opportunity as the company positions compression as a first mover advantage into the production, storage and transport of hydrogen.

The capital raising will accelerate the development of the Tiwi green hydrogen project while also supporting our ongoing engineering, approvals and commercialisation for our proprietary ship design.

Global Energy share price summary

Over the last 12 months, Global Energy shares have accelerated by around 50%. They are also up 75% year to date.

Global Energy presides a market capitalisation of roughly $70 million, with approximately 457.17 million shares on its registry.

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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