Mercantile Ports and Logistics Ltd (LON: MPL) is raising £3m from a placing at 3p a share and a group of investors, including existing substantial shareholder Hunch Ventures and Investment Private Ltd, are subscribing for £5.85m worth of shares. A retail offer could raise up to £1.2m more at 3p a share.
The retail offer will be open until 4.30pm on 12 June. The minimum subscription is £250. The authorised intermediaries involved in the offer will be found at https://www.bookbuild.live/deals/DX72E1/authorised-intermediaries.
This cash will strengthen the AIM-quoted port operator’s balance sheet and put management in a stronger position when it is renegotiating its debt facilities. Hutch Ventures will end up with more than 40% of the share capital. Hunch Ventures has extended its £4.4m loan facility to a subsidiary until 15 June 2025, although it is currently undrawn.
The share price is 4.25p (4p/4.5p), which values the company at £1.8m. This will be a highly dilutive share issue. Net debt is expected to be £43.7m at the end of 2022.
Mercantile Ports & Logistics Ltd recently signed a five-year contract with Lucky Marine Shipping & Logistics to handle containers at the port facility at Karanja. Volumes will build up over two years. Additional contracts are set to be signed for the facility.
The company is still developing a port and logistics facility in Navi Mumbai, Maharashtra in India.