Electro Optic Systems Holdings Ltd (ASX: EOS) shares have returned from a trading halt and crashed deep into the red.
In morning trade, the high-flying ASX All Ords stock is down 19% to $1.69.
Though, the defence and space systems technology company's shares remain up approximately 275% on a 12-month basis despite today's weakness.
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Why is this ASX All Ords stock crashing?
The catalyst for this weakness has been the completion of the company's fully underwritten placement.
According to the release, Electro Optic Systems has successfully completed a $35 million fully underwritten placement of approximately 20,588,235 new shares to eligible institutional investors at a price of $1.70 per new share.
This represents an 18.3% discount to where the ASX All Ords stock was trading prior to its halt.
It will now push ahead with its share purchase plan which aims to raise a further $5 million at the same price as its institutional placement. Though, given today's decline, it remains to be seen how appealing this will be to shareholders.
Why is it raising funds?
Electro Optic Systems advised that it is raising the funds to support future sales growth in key global markets. This is through the investment in long lead time critical supplies, specifically RWS cannons, investment in other long lead time equipment components, and security deposits for bank guarantees.
The ASX All Ords stock's managing director and CEO, Dr Andreas Schwer, was pleased with the placement. He said:
The Placement attracted healthy demand. We are grateful for the ongoing support from our existing institutional shareholders and pleased to welcome a number of new international and local institutional investors to the register. We are delighted to have secured the funding required to support our ongoing growth.
