The PolyNovo Ltd (ASX: PNV) share price has returned from its trading halt and sunk into the red.
At the time of writing, the medical device companyâs shares are down 7% to $1.93.
Why is the PolyNovo share price sinking?
The weakness in the PolyNovo share price has been driven by the completion of the companyâs institutional placement.
According to the release, the company has raised $30 million before costs through the issue of approximately 15.8 million shares at $1.90 per new share. This represents a 9.1% discount to the PolyNovo share price prior to the halt.
Management advised that the institutional placement was strongly supported by existing institutional shareholders and new domestic and offshore investors.
The company will also seek to raise a further $3 million via a placement to directors and $17 million via a non-underwritten share purchase plan. The latter is being undertaken at the same price as the equity raising.
Why is PolyNovo raising funds?
PolyNovo revealed that the proceeds from the equity raising will be used to accelerate growth in the United States and the rest of the world, including the newest markets of Canada, India, and Hong Kong.
In addition, the equity raising will fund the construction of a new co-located manufacturing, R&D, and office facility in Port Melbourne to satisfy a significant increase in demand for its NovoSorb product.
PolyNovoâs CEO, Swami Raote, commented:
We are delighted to have received such strong demand from a number of our existing institutional shareholders who continue to support PolyNovo, and we welcome a number of new institutional investors as we continue on our journey to improve patient outcomes.
Proceeds from the equity raising will allow us to continue to capitalise on the significant opportunities available to us including geographic sales team and indication expansion, investment in R&D and the development of a new facility to satisfy the growing demand for NovoSorb.
The post Why is the PolyNovo share price sinking 7% today? appeared first on The Motley Fool Australia.
FREE Beginners Investing Guide
Despite what some people may say – we believe investing in shares doesnât have to be overwhelming or complicatedâ¦
For over a decade, weâve been helping everyday Aussies get started on their journey.
And to help even more people cut through some of the confusion âexperts” seem to want to perpetuate – weâve created a brand-new âhow toâ guide.
Yes, Claim my FREE copy!
*Returns as of November 7 2022
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- Why is the Polynovo share price on ice today?
- Two 5-bagger health tech ASX shares ready to rocket again: expert
- If you invested $5,000 in each of these ASX shares 10 years ago, youâd be a millionaire today
- Guess which ASX All Ords share turned a $30,000 investment into $1 million
- The ASX All Ords share thatâs a better, cheaper buy than Polynovo: Wilsons
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended POLYNOVO FPO. 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 Scott Phillips.
from The Motley Fool Australia https://ift.tt/leSU6OA
Leave a Reply