29th Apr 2014 09:33
LONDON (Alliance News) - Specialist iodine producer Iofina PLC Tuesday said it has successfully completed a USD5 million unsecured bond to be issued to Panacea Ltd.
The company said it intends to use the proceeds of the bond to strengthen the company's cash position, which stood at USD2.3 million at the end of March, as it looks at expanding its production base.
Iofina said the bond is convertible into fully paid shares at a conversion price equivalent to 40 pence per share, which is roughly a 5.6% premium to its closing price of 37.75 pence on Monday.
Iofina shares were up 14% to 43.00 pence, putting it in the top five AIM ALL-Share risers Tuesday.
"While this financing is not needed to sustain the current operations of the business, it allows us to look at further expansion through the construction of mobile units or plants similar to IO#2, both of which would be expected to be accretive to earnings," Co-Founder Lance Baller said in a statement.
The news comes days after the company announced that its pretax loss widened in 2013 due to higher expenses but noted that production has seen a vast increase in its first quarter 2014 helping the company to exceed its revenue targets for the three months.
During the recent quarter, the company completed development of its IO#4 and IO#5 iodine extraction plants and its IO#6 site is on target to be completed during the second quarter.
Earlier last week, Iofina shares more than halved after it reduced its production forecasts for the year to "materially below current market expectations" due to its principal operator's planned fracking schedule. The schedule is expected to significantly reduce the group's brine supply and as a consequence the company plant runtime for Iofina's IOsorb production plants, IO#3, IO#4, IO#5 and IO#6 will be affected.
By Tom McIvor; [email protected]; @TomMcIvor1
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