As Australian Vintage announced a successful $15 million capital raise, it lifted its three-week suspension and resumed trading, only to see its market capitalisation almost halve as its share price fell by 45 per cent.
Australian Vintage said the placement and institutional entitlement offer was fully subscribed and there was strong demand from existing and new investors.
The company said that combined with its debt facility increase and extension, it expects to raise at least $45 million in incremental capital.
“Incremental capital provides enhanced levels of liquidity and financial flexibility and better positions Australian Vintage to capitalise on future growth opportunities and execute its strategic plan,” the company said.
Company chair, Richard Davis, told The Australian Financial Review the 45 per cent share slide was expected because the company decided to shore up its balance sheet with a significant discount, so it was in a better position to pursue a merger.
The raise priced shares at 20 cents, a 42 per cent discount on its last close on 22 May of 34.5 cents.
At the end of trade on 13 June, shares closed at 19 cents, giving the company a market capitalisation of $47.3 million.
