If you'd bought shares in S&P/ASX 300 Index (ASX: XKO) uranium stock Bannerman Energy Ltd (ASX: BMN) on 22 April and sold them at market close on Monday, you'd have netted a tidy 100.0% gain.
Today, you'd be giving back some of those profits.
Bannerman Energy shares entered a trading halt on Tuesday pending a capital raising announcement.
That announcement was released before the opening bell today. And investors are responding by hitting their sell buttons.
Shares in Bannerman Energy closed Monday trading for $3.52. In early trade on Tuesday, shares are changing hands for $3.21 apiece, down 8.8%.
Here's what's happening.
Image source: Getty Images
ASX 300 uranium stock slumps on $85 million capital raising
Bannerman Energy shares are taking a tumble after the company reported it had received firm commitments for a single placement of approximately 26.6 million new shares to new and existing institutional and sophisticated investors.
The ASX 300 uranium stock will raise some $85 million with the share issue.
So, why are investors favouring their sell buttons?
Well, because the new shares are being issued for $3.20 apiece. That's 9.1% below Monday's closing price before the stock entered a trading halt.
The uranium miner said it will use the new proceeds, along with its existing cash, to fund construction activities, infrastructure costs, and general working capital as it advances its flagship Etango uranium project, located in Namibia, towards a Final Investment Decision (FID).
Bannerman said it expects to have cash reserves of around $140 million upon completion of the capital raise.
Management expects the new share placement to occur on 2 July.
What did management say?
Commenting on the $85 million capital raise that's pressuring the ASX 300 uranium stock today, Bannerman Energy executive chairman Brandon Munro said, "We are delighted with the strength of the support from our existing register and the high quality of the new institutional shareholders that provided cornerstones for this placement."
Munro added:
The collective scale and quality of the participating investors is a strong endorsement of our Etango uranium project and corporate strategy.
Our enhanced balance sheet strength is a powerful enabler for us to execute our streamlined strategy of financing and constructing Etango. Against the backdrop of improving sector sentiment and nuclear utility activity, we will continue taking measured steps towards realising the Company's opportunity to deliver uranium into a sector pinch-point.
With today's intraday slide factored in, shares in the ASX 300 uranium stock remain up 82% since 22 April.
