Cervantes Corporation Limited (ASX:CVS) has unveiled its plan to undertake a series of equity raisings to recapitalise and strengthen its balance sheet.
The company is aiming to raise a total of $3,366,512 as detailed below:
- $804,012 through a fully underwritten 1:2 rights issue to existing shareholders at an issue price of 0.3 cents per share, together with a 1:2 free attaching listed option exercisable within 3 years from the date of issue at 1 cent;
- up to $2,250,000 through a fully underwritten placement of shares at 0.3 cents per share, together with a 1:2 free attaching listed option on the same terms as the rights issue; and
- $312,500 through a placement of options at an issue price of 0.05 cents per option. These options will be exercisable on the same terms as the rights and placement issues.
Proposed use of funds
The exploration focus of Cervantes moving forward will be on the Primrose Project, however, the company will also look at other opportunities in the resource sector.
Cervantes’s proposed budget for the next 12 months in the event the company completes the recapitalisation strategy is set out below:
Reinstatement to trading on ASX
Cervantes has been in ongoing discussions with the ASX in relation to the reinstatement of its securities to trading.
Following on from these discussions, the company provided submissions to ASX setting out the details of the recapitalisation strategy and seeking ASX’s confirmation that the proposal will be adequate for the purposes of ASX Listing Rule 12.2 and that, if the company implements the recapitalisation strategy, its financial condition will be sufficient to warrant the lifting of the company’s current suspension.
ASX has now provided this confirmation, subject to standard conditions, including the company, without limitation, lodging a full form prospectus with the ASIC/ASX and also:
(a) the Company providing a ‘working capital statement’ similar to that required by Listing Rule 1.3.3(a) to the effect that following completion of the capital raisings, CVS will have sufficient working capital at the time of reinstatement to carry out its activities; and
(b) the Company satisfying the ‘working capital test’ of at least $1.5 million pursuant to Listing Rule 1.3.3(c).