The Syrah Resources Ltd (ASX: SYR) share price is on course to end the week with a big decline.
In morning trade, the ASX 300 battery materials stock has returned from a trading halt and dropped 20% to 55.5 cents.
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Why is this ASX 300 battery materials stock crashing?
The weakness in the Syrah Resources share price today has been driven by the completion of yet another capital raising this morning.
According to the release, the company has successfully completed a fully underwritten institutional placement and the accelerated institutional component of its 1 for 10.2 pro rata accelerated non-renounceable entitlement offer.
The ASX 300 battery materials stock revealed that the placement and institutional entitlement offer attracted strong support from both existing and new institutional shareholders, raising approximately $80 million at a fixed price of $0.55 per new share.
Approximately 85% of entitlements available to eligible institutional shareholders in the institutional entitlement offer were taken up. And new shares not taken up have been fully allocated to existing shareholders and new investors.
Syrah will now push ahead with the retail component of the entitlement offer, which is expected to raise approximately $18 million.
Why is Syrah raising funds again?
The company advised that the proceeds of the equity raising will be used for a number of activities.
This includes preserving Balama operating mode optionality, funding Vidalia operating costs and reserve accounts under its loan with the US Department of Energy, supporting Vidalia's ramp-up and progressing product qualification, and accelerating AAM development.
Syrah's managing director and CEO, Shaun Verner, was pleased with the capital raising. He commented:
We are pleased with the strong support received from existing shareholders, and welcome new investors to Syrah's register. The equity raising provides funding to preserve optionality with respect to Balama's operating mode, support the continued ramp-up of production at Vidalia, and our path to product qualification and commercial sales and to progress the Vidalia Further Expansion project to FID readiness.
This ASX 300 battery materials stock is now down 67% over the last 12 months.
