Shares of Eddie Stobart Logistics PLC (LON: ESL) today surged 22% after the company announced that it had raised £9 million through a discounted share placement to help facilitate its conversion into an investment company.
The company noted that the amount raised was higher than the £6 million required for the process and confirmed that it would raise an additional £7 million via a share placement and subscription on the same terms.
Eddie Stobart Logistics intends to raise a total of £16 million by issuing 320.3 million new shares at 5p apiece, a 37.5% discount to Tuesday’s closing price. The company intends to change its name to Logistics Development Group PLC to differentiate itself from its investments.
The company said it would use the new funds to boost its working capital requirements and to finance the due diligence process on some of its acquisition targets.
Adrian Collins, the company’s chairman, said:
“We are pleased to have conditionally raised £9mln, more than meeting our previously-announced technical requirement to raise £6mln to complete our conversion to an AIM investing company.”
“Today, we have also announced that we intend to change the name of the Company to Logistics Development Group plc. This marks our transition to a growth-focused investment vehicle whilst further delineating the Company from the Eddie Stobart business, in which we hold an indirect interest and which, as previously announced, has returned to profitability and firmly put its past challenges behind it.”
Eddie Stobart share price
Eddie Stobart shares today surged 25% to trade at 10p having rallied from Tuesday’s closing price of 8p.