Halt! Why is the Envirosuite (ASX:EVS) share price paused?

The environmental management solutions company is hoping for $10.5 million in a capital raise.

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Shares in environmental management solutions player Envirosuite Ltd (ASX: EVS) are on ice after the company requested a trading halt today.

Before the pause button was pressed, the Envirosuite share price was set to open the day at 22.5 cents, after gaining about 5% from its previous close in off-market trading.

The company requested a trading halt in preparation for an upcoming capital raise. Here are the main details.

What is Envirosuite up to?

Envirosuite wants to raise $10.5 million from the big end of town to drive growth in its water treatment technology segment.

The institutional placement is priced at 20 cents per share. This represents an 11% discount on Tuesday’s closing Envirosuite share price. It is also a 15% discount on the recent share price high of 23.5 cents.

Bell Potter and Wilsons are the book-runners and joint lead managers on the offer, according to The Australian Financial Review. Investors can expect an announcement on the completion of the capital raise on or before 6 December.

Envirosuite is looking to the capital markets after advising it has signed 2 strategic agreements with consulting company GHD.

GHD will support the scaling of implementation of “Envirosuite’s EVS Water for major water treatment facilities as well as refer prospective clients to Envirosuite”, according to an update on 24 November.

EVS Water is a 3-product platform that links artificial intelligence with leading water modelling approaches. It helps companies reduce their operational risk and expenses whilst remaining compliant.

Today’s announcement follows a previous capital raise in May. Envirosuite secured $14 million – $8 million of which was offered at a placement price of 8.5 cents per share.

That capital raising diluted Envirosuite’s share count by almost 71 million shares. It is not yet clear how many shares Envirosuite will issue during this next equity round.

Envirosuite share price summary

In 2021, the Envirosuite share price has risen by 18.4%. It began marching northwards in July but has since levelled off. It has been trading sideways for the past 2 months.

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The author has no positions 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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