Advertisement

Do-or-die funding effort raises $14.7m for Galaxy

Galaxy Resources has scraped over the threshold for its heavily dilutive do-or-die capital raising, announcing yesterday it had secured $14.68 million from shareholders.

Originally chasing up to $46 million in the one-for-one offer, yesterday's shortfall means about 32 per of the company's register committed to the raising.

Galaxy has been battling operational and financial spot fires on a number of fronts over the past 12 months and was originally targeting $8 million to keep afloat.

The minimum target increased to $12 million in June and was soon followed by the appointment of former Lithium One chairman Martin Rowley to a special management committee following the departure of managing director Iggy Tan.

The company said yesterday that major shareholder Deutsche Bank would take up the 8¢ offer and shortfall to keep its 7.8 per cent holding in the company.

Galaxy has been anchored in a trading suspension since April and last traded at 15.5¢, according to Bloomberg. Galaxy will hit the boards once again on Monday.

A big share price drop is expected because of the heavily discounted raising price.

The raising was not underwritten and Galaxy has appointed Patersons Securities to place the shortfall.

It said potential new institutional investors had shown "strong interest" after its recent global roadshow.

Galaxy had indicated the funds raised would be used for working capital and to repay debt.

The company has debt of $134 million and $62 million in convertible bonds.