Shares in Kore Potash, a London-listed potash development company, experienced a decline after the announcement of its plans to raise $1 million. The funds will be obtained through a discounted subscription and a convertible loan issue. The company intends to use the proceeds to fulfill a contract associated with the Kola potash project in the Republic of Congo.
At 0743 GMT, shares were down 12%, or 0.08 pence, at 0.55 pence.
Fundraising Details
According to the company's statement on Tuesday, it will raise $800,000 by issuing 124.4 million new ordinary shares to eligible shareholders at a price of 0.5 pence per share. This offering represents a 21% discount in comparison to Monday's closing price of 0.63 pence per share. Additionally, convertible loans with a value of $200,000 have been issued.
Revised Agreement with SEPCO Electric Power Construction Corp.
Kore Potash has entered into a revised agreement with SEPCO Electric Power Construction Corp., which involves providing an engineering, procurement, and construction contract for the Kola project.
PowerChina International Group, SEPCO's parent company, has conducted a review of Kola's design and construction schedule. As a result, it was determined that further engineering design works are necessary before a proposal and contract can be presented by PowerChina and SEPCO. The additional engineering works are estimated to cost over $10 million. Kore Potash's contribution is capped at a maximum of $5 million, while PowerChina will cover the remaining expenses.
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