The Talga Group Ltd (ASX: TLG) share price is on course to end the week deep in the red.
In morning trade, the battery materials company's shares are down 15% to $1.13.
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Why is the Talga share price sinking?
Investors have been selling down the Talga share price on Friday after the company completed an institutional placement.
According to the release, the company has received firm commitments for a $22 million placement of new fully paid ordinary Talga shares at a price of $1.10 per share. This represents a 17% discount to the Talga share price prior to its trading halt.
Once completed, Talga's pro forma cash position before costs at 30 September 2022 will be $27 million.
Why is Talga raising funds?
Proceeds from the placement will be used for a number of items.
This includes funding Talga's advancement of the Vittangi Anode Project, expanded operation of the Electric Vehicle Anode qualification plant, Niska expansion workstreams and resource drilling, next generation anode development (including Talnode-Si commercialisation), and for general working capital.
Talga will now seek to raise a further $10 million from retail investors via a share purchase plan. This will be undertaken at the same price as the placement.
Following today's decline, the Talga share price has now lost a third of its value since the start of the year.
