Shares of Symphony Environmental Technologies plc (LON: SYM) gapped up 7.74% after announcing that it had raised £750,000 via a share subscription with the shares sold at a premium.
The company noted that Vincel Investment Holdings Limited bought 2.5 million shares at a significant premium since each was priced at 30p, representing a 13% premium to yesterday’s closing price.
Vincel had also secured warrants to acquire another 2.5 million shares in the next six months at a premium exercise price of 40p each. After the conclusion of the two transactions, Vincel will own 14.8% of the company’s issued share capital.
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Vincel is owned by Shruti Lophia, daughter of Mr S P Lohia, chairman of Indorama Corporation in Singapore.
Investors cheered the capital raising initiative, which valued Symphony Environmental’s shares at a premium, making the dilution of existing shareholders more manageable given the rally.
From a technical perspective, Symphony shares could not break above the 28.55p resistance level despite the new shares being sold at 30p each, indicating that sellers were willing to jump in and defend the level.
However, I believe that there is a good chance the shares will break above the level due to the warrants issued to Miss Lophia, which are priced at a significant exercise premium of 40p each. Investors looking to capitalise on such a move higher should look out for potential entries at current levels.
*This is not investment advice.
Symphony Environmental share price.
Symphony Environmental share price gaped up 7.74% to trade at 28.55p, rising from Thursday’s closing price of 26.50p.