Eqtec Shares Surged 26.7% on Capital Raise and Debt Conversion

The EQTEC PLC (LON: EQT) share price surged 26.7% after announcing a new investor subscription and a debt conversion by an existing investor. The company announced the successful acquisition of £0.5 million through a direct subscription. The funding round involved issuing 21,276,596 new ordinary shares, each valued at €0.01, at 2.35 pence per share to Verde Corporation (Verde). 

The infusion of funds, representing approximately 11.72% of the company's existing share capital, matches the mid-market closing price per ordinary share as of February 9, 2024. The capital raised will bolster the group's working capital, supporting its ongoing operations and growth initiatives.

In an exciting development accompanying Verde's subscription, two of EQTEC's significant shareholders, Altair Group Investment Limited (Altair) and Pitcole Limited (Pitcole), have committed to converting their outstanding loan amounts from a £3 million syndicated loan facility, previously announced on November 20, 2023, into equity, contingent upon the formal admission of these new shares.

Furthermore, EQTEC has facilitated an introduction between a UK Special Situations investor and YA II PN Ltd along with Riverfort Global Opportunities PCC Limited, enabling the purchase of an additional 10,162,349 ordinary shares from these lenders. 

Verde, a part of the US-based Verde Group, is a conglomerate focusing on sustainability and technology-driven ventures. With the completion of this subscription, Verde will hold a 9.67% stake in EQTEC's enlarged share capital, pending admission. 

This strategic investment is subject to certain conditions, including the receipt of subscription proceeds by February 19, 2024, and the admission of the new shares to trading on AIM by February 22, 2024.

Additionally, Verde has pledged to conduct a second subscription of £1 million at a significant premium, alongside acquiring equivalent warrants, contingent upon satisfactory due diligence and shareholder consent at an upcoming Extraordinary General Meeting. 

This move indicates Verde's long-term investment strategy and commitment to supporting EQTEC's growth. Verde also reserves the right to appoint a board director should their stake in the company reach 10% or more.

Eqtec share price.

The Eqtec share price surged 26.67% to trade at 3.04p from Monday’s closing price of 2.40p.