The Electro Optic Systems Holdings Ltd (ASX: EOS) share price is up 3.06% in late trading on Tuesday amid the completion of an institutional $15 million capital raise.
The company is also offering a non-renounceable $2 million share purchase plan (SPP) for eligible existing Electro Optic Systems shareholders.
The net proceeds of the placement and SPP will be used for working capital and near-term capital requirements. Priority will be given to the core defence business.
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What does Electro Optic Systems do?
Electro Optic Systems is an Australian technology company that develops and produces electro-optic technologies for the aerospace market.
Of its three reportable segments, defence is its biggest revenue raiser. The other two segments are communication and space.
What are the details of the SPP?
On 29 June, Electro Optic Systems announced a successful non-underwritten placement of 12.5 million new fully paid ordinary shares to institutional investors to raise approximately $15 million.
The placement shares were priced at $1.20 apiece and were issued today.
The company also announced the SPP, giving eligible shareholders the opportunity to purchase up to $30,000 worth of new shares at the same price.
In a letter to shareholders provided to the ASX today, Electro Optic Systems said the SPP was open to investors on the company register as of 7pm AEST on 28 June.
Shareholders can apply to buy parcels of shares in lots of $2,500, $5,000, $7,500, $10,000, $15,000, $22,500, or $30,000.
Investors must apply and pay for their new shares by 5pm AEST on 19 July.
There are no brokerage or other transaction costs involved in the SPP.
What did management say?
We welcome the support for the Placement and the new institutional investors to the register. On behalf of the Board of Directors of EOS, I would also like to thank our existing shareholders for their ongoing support.
Market update for 1H FY22
Electro Optic Systems also provided the ASX with an update for 1H FY22.
For the six months to 30 June, the company is expecting an EBIT loss of approximately $45 million (unaudited). This includes a $15 million loss relating to SpaceLink.
Electro Optic Systems said two contract delays and the federal election's impact on new projects affected revenue.
The company provided guidance that it expects FY22 revenue to be equal to or exceed FY21.
