Centrex Limited (ASX:CXM) Launches $10.4 Million Entitlement Offer
Entitlement Offer Details
Centrex Limited (ASX:CXM) has announced an Entitlement Offer to eligible shareholders to raise approximately $10.4 million, conditional on a minimum subscription of $9.0 million. The offer will enable essential plant upgrades and bolster working capital, following the successful restructuring of trade debts with its logistics provider.
The Entitlement Offer, structured as a pro-rata, non-renounceable offer, provides existing shareholders the opportunity to subscribe for one ordinary share at an issue price of $0.012 for each share held as of the Record Date, 23 January 2025. Shareholders will also receive one free option for every two new shares acquired.
Future Financial Position
Following a successful offer, Centrex anticipates pro forma net cash of approximately $9.8 million by 14 February 2025. This expected increase in cash position is designed to support its operations and strategic expansions.
CEO Comments
Robert Mencel, CEO & Managing Director of Centrex, stated, “The Entitlement Issue is a vital step in ensuring the financial viability of the Company moving forward as well as building a financial foundation needed to complete the Stage 1.5 Expansion.” He emphasised that this initiative will help advance the company’s strategy with greater confidence, thanks to strong relationships established with customers over the years.
Use of Proceeds
The funds raised through the Entitlement Offer will primarily be allocated to:
– Plant upgrades: $4.25 million
– Tailing facility: $1.19 million
– Workshops and camp expansion: $0.69 million
– Working Capital: $3.67 million
The remaining funds will cover the expenses associated with the Offer.
Centrex has specified that in the event the minimum subscription is not met, it may seek alternative funding methods, including asset sales or further capital initiatives, which could impact its ongoing operations.
Entitlement Offer Timeline
The Entitlement Offer will commence at 9.00 am on 24 January 2025 and close on 14 February 2025. Further details will be available in the Prospectus, which is expected to be lodged with the ASX on 20 January 2025.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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