The benchmark S&P/ASX 200 Index (ASX: XJO) has started the week poorly. On Monday morning the ASX 200 is now tracking 54 basis points lower at 7,056 points.
One ASX share is flaming ahead of the pack today and is now trading 52.84% higher at the time of writing. Shares in Stanmore Resources Ltd (ASX: SMR) are well in the green after surging out of the opening gate and now fetch $1.75.
Prior to today’s announcement, shares in the ASX coal miner had been on halt since 2 March. Before this, they traded in a two-month range of roughly $1.20 per share.
Why are Stanmore Resources shares flaming higher today?
Investors are responding positively to a company announcement out of Stanmore’s camp today. The company says it has successfully completed an institutional entitlement offer raising a gross of approximately $656 million.
The deal was a 7-for-3 underwritten entitlement offer, giving the investors retail rights to trade new fully-paid ordinary shares in Stanmore at an offer price of $1.10 per share.
Stanmore says this tranche of capital signifies the first stage of its $694 million entire capital raising announced on 3 March.
Eligible shareholders can elect to take up all of their entitlements by the closing date or let them lapse by discretion, per the release.
Stanmore also notes that these entitlements can be traded on ASX “in whole or in part.” Trading will commence on 7 March 2022 under the ASX ticker “SMRR”.
Trading of the instruments will conclude after the closing bell on 14 March 2022.
“Eligible Shareholders in the Retail Entitlement Offer will be sent a retail offer booklet, which will contain further information in respect of the Retail Entitlement Offer and a personalised entitlement and acceptance form, on 10 March 2022 and lodged with ASX on that date,” the company says.
Management commentary
Stanmore managing director Marcelo Matos spoke on the announcement today:
The overwhelming support for the offer from both existing shareholders and new investors is a real endorsement of the value of the proposition offered by the BMC acquisition and the enlarged Stanmore business. Stanmore is excited to welcome some significant new Australian and international investors to its register.
Stanmore Resources share price summary
In the last 12 months this ASX share has soared over 173%. It has gained another 69% this year to date.
Prior to the announcement it was trading in a tight range of roughly $1.20 per share for the last two months, and wasn’t showing anything exciting. Until today, that is.
Now, as a result of today’s news, shares have surged 49% in the last month alone. That puts Stanmore’s performance ahead of the majority of its ASX peers so far this year.
The post Here’s why this ASX coal share is rocketing 52% today appeared first on The Motley Fool Australia.
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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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