Boss Energy (ASX:BOE) shares slip 6% on ASX return. Here’s why

The Boss Energy Ltd (ASX: BOE) share price is in reverse after coming out of a trading halt today.

The uranium producer provided an update to investors in regards to its capital raising efforts early this morning.

When the market opened, Boss Energy shares treaded lower at an intraday high of $2.37, however, those losses were quickly deepened.

At the time of writing, the company’s share price is down 6.20% to $2.27.

What did Boss Energy announce?

A possible catalyst for investors dragging down Boss Energy shares is an impending share dilution by the company.

In a statement to the ASX, Boss Energy revealed it has successfully completed a $120 million equity raise.

This will see approximately 56 million new ordinary shares issued through a two-tranche placement at a price of $2.15. The offer represents an 11.2% discount to the last closing price of Boss Energy shares on 15 March 2022.

While the first tranche of 43 million shares will be utilised by Boss Energy’s existing placement capacity, the second tranche of 13 million shares will be subject to shareholder approval.

This will be sought at the company’s extraordinary general meeting to be held in late-April.

The placement received strong demand from both existing shareholders as well as a number of new domestic and global institutional investors.

In addition, a bookbuild to sell down approximately 2.4 million shares held by Boss Directors was successfully completed. This was listed at the offer price, worth approximately $5 million.

In determining the allocation of Boss Energy shares, the company will use a pro rata participation method to eligible shareholders.

The proceeds raised will increase the combined value of the company’s cash and strategic uranium inventory to over $200 million. This will be used to fund the development of its Honeymoon Uranium Project in South Australia.

Boss Energy managing director, Duncan Craib commented:

The overwhelming demand for the placement reflects the competitive strengths of Honeymoon and its status as Australia’s next uranium producer.

The combination of the strong outlook for the uranium market and Honeymoon’s short lead time to production means Boss is ideally positioned to capitalise on its huge opportunity.

About the Boss Energy share price

Since this time last year, Boss Energy shares have accelerated by over 60% on the back of surging uranium prices.

It’s worth noting that the company’s shares rocketed to an all-time high of $3.08 in November, before backtracking 28%.

On valuation grounds, Boss Energy presides a market capitalisation of around $648.04 million, with 285.48 million shares on issue.

The post Boss Energy (ASX:BOE) shares slip 6% on ASX return. Here’s why appeared first on The Motley Fool Australia.

More reading

• ‘Australia’s next uranium producer’: Why the Boss Energy (ASX:BOE) share price is halted today
• Why are ASX uranium shares having such a stellar day?
• What a Boss! Why the Boss Energy (ASX:BOE) share price is soaring 13% today
• Why these 2 ASX uranium shares could be set for a boost this month
• Why is the Boss Energy (ASX:BOE) share price crashing 17% today?

Motley Fool contributor Aaron Teboneras 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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