This morning AHQ entered a trading halt to undertake a capital raising.
The capital raising will be by the way of
- $25 Million two tranche placement at $0.50 per shares with the ability to accept overs
- Share Purchase Plan (SPP) capped at $5 Million
The new shares are being issued at a 13.8% discount to the last traded price of $0.58.
The funds from the capital raising are being used to acquire assets of premium mid-vol coking coal assets at Short Creek mine in Birmingham Alabama USA.
The acquisitions build out AHQ plans to become a mid-tier coking coal producer. For now, it remains to be seen if this new acquisition will add value in the short term. The long term value of the assets remains intact so for the moment we will continue to hold the existing position.
Trade Action
As the issue of so many new shares is likely to have a negative effect on the share price in the short term we will temporarily remove the $0.45 stop loss level. We will reinstate the stop loss level when the placement and SPP have been finalised.
Once more details of the SPP become known we will determine if we decide to take up the opportunity to participate in the offer.