The Veem Ltd (ASX: VEE) share price is in freefall today following the company's update on its capital raise.
During early afternoon trade, the marine technology company's shares are down a sizeable 11.51% to $1.23. This means that since 3 September, its share price has lost close to 15%, hitting early August lows.
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Veem completes capital raise
A catalyst to the falling Veem share price could be new shares coming onto the company's registry.
According to the company announcement, Veem advised it has successfully raised $6 million before costs by a way of placement.
The offer received strong support from both institutional and sophisticated investors, subscribing for 5.1 million shares at $1.18 apiece. This represents a 15.1% discount to the last traded price on 8 September and a 10.3% discount to the 15-day volume-weighted average price.
Concurrent with the placement and investor demand, the company's founders, the Miocevich family, have offloaded 11.9 million shares. The partial sell-down is expected to improve liquidity and the free float of Veem shares in the market.
Once the transaction is fulfilled, the Miocevich family will hold a controlling 50.4% interest in the company. No intention has been stated to sell any more shares in the near-term future.
In addition to the placement, Veem announced it will open a Share Purchase Plan (SPP) on 22 September. The pricing terms will be the same as the placement, with the intention to raise approximately a further $2 million.
Both proceeds will be directed towards a number of initiatives. These include funding research and development, sales and marketing to drive gyro sales growth and working capital.
Veem chair Brad Miocevich commented:
We are particularly excited about the very high demand from investors leading to a successful capital raising which will allow us to further invest in the gyrostabilizer business which is at the leading edge of the industry. The market is significant and over the past few years we have truly started to become recognised as the global leader. We now have the opportunity to ensure we deliver on this mission as well as the broader base of the business.
About the Veem share price
Over the last 12 months, Veem shares have climbed by more than 166% and, year-to-date, are up 51%. Despite today's drop, the company's shares have gradually increased over the long term to provide fruitful returns for investors.
Veem presides a market capitalisation of roughly $161 million and has 130 million shares on its registry.
