Up 90% in a year, why is this ASX 300 uranium stock suddenly halted?

Here's why this high-flying stock is out of action today.

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Deep Yellow Limited (ASX: DYL) shares have been exceptionally strong performers over the last 12 months.

During this time, the ASX 300 uranium stock has raced 90% higher.

To put that into context, if you had invested $20,000 a year ago, you would now have $38,000.

During this time, despite rampant media speculation, the uranium developer resisted temptation to raise funds.

Until now.

ASX 300 uranium stock to raise funds

This morning, Deep Yellow requested a trading halt. Its request states:

Deep Yellow is in the process of finalising arrangements in relation to a capital raising. Deep Yellow anticipates that the trading halt will be required until the earlier of the commencement of trading on Monday, 11 March 2024 or the release of an announcement by the Company regarding a capital raising.

What is the company raising?

As things stand, the ASX 300 uranium stock has not released to the market what it is seeking to raise or why it is raising funds.

However, the AFR is reporting that the company is seeking to raise a massive $250 million from investors. This comprises a $220 million institutional placement and a $30 million share purchase plan for retail shareholders. Though, Deep Yellow will reportedly need shareholder approval for some of its institutional placement.

According to the report, Deep Yellow is seeking to raise the funds from institutional investors at $1.225 per new share.

While this represents a modest discount of 3.5% to the prevailing share price, it is a 25% discount to where its shares were trading just a month ago. So, shareholders may be a touch disappointed with the timing.

The funds are expected to be used to support the development of Deep Yellow's Tumas project in Namibia. The company is targeting 3.75 million pounds of annual uranium production from Tumas, putting it in a strong position to benefit from sky-high prices.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

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