The BWX Ltd (ASX: BWX) share price has come out of a trading halt to plummet during mid-morning trade.
This comes after the company announced an FY22 trading update as well as a capital raise to reduce its debt.
At the time of writing, the personal care products company's shares are fetching for 72.5 cents, down 38.03%.
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What's driving the BWX share price lower?
Investors are scrambling to sell BWX shares after an impending share dilution from the company.
According to the release, BWX advised it has launched a fully underwritten $23.2 million capital raise.
The details consist of a $13.5 million placement to sophisticated and professional investors and a $9.7 million non-renounceable entitlement offer.
Listed at a price of 60 cents apiece, this represents a 48.7% discount to the last closing price of $1.17 on 23 June 2022.
Approximately 38.6 million new fully paid ordinary shares in BWX are set to be issued under the offer. This accounts for around 24% of the company's existing ordinary shares on issue.
The proceeds will support BWX's business operations as well as accelerate its "debt reduction towards more conservative leverage ratios."
Pro-forma net debt as at 30 June 2022 is expected to be between $58-62 million (following the net proceeds received).
FY22 trading update
Furthermore, BWX provided an FY22 trading update in regards to its revenue and earnings guidance.
Management is forecasting underlying revenue to tip $212 million, up 9% from the $194.3 million achieved in FY21.
However, underlying EBITDA is expected to come in the range of $12-$16 million, down 59% from $34.5 million in FY21.
Looking further ahead, BWX's financial metrics are predicted to greatly change in FY23.
The business is forecasting revenue to be roughly $260-$270 million, and EBITDA to come in between $45-$49 million.
The BWX share price has fallen by more than 86% over the past 12 months and is down 84% year-to-date.
