The Australian share market may be pushing higher again on Wednesday, but the same cannot be said for Novonix Ltd (ASX: NVX) shares.
The battery materials and technology company's shares are back from their trading halt and crashing deep into the red.
At the time of writing, the ASX All Ords stock is down 22% to 75 cents.
Image source: Getty Images
Why is this ASX All Ords stock crashing?
The catalyst for today's decline has been news that the battery materials technology company has successfully completed an institutional placement.
According to the release, the ASX All Ords stock is raising $44.4 million through a fully underwritten placement of new shares to institutional and sophisticated investors at an offer price of 60 cents per new share.
This represents a sizeable discount of approximately 38% to its last close price of 96.5 cents.
Novonix won't be stopping there. It is now pushing ahead with its non-underwritten share purchase plan (SPP) to eligible retail shareholders.
This SPP aims to raise approximately $5 million and will provide each eligible shareholder with the opportunity to apply for up to $30,000 worth of Novonix shares. But if demand exceeds $5 million, the ASX All Ords stock may scale back applications. This will be undertaken at the same price as the institutional placement.
Novonix's chair, Admiral Robert J. Natter, was pleased with the cash injection. He said:
The Institutional Placement was supported by the Company's existing institutional shareholders. It is also pleasing to have the opportunity to welcome a number of new high quality domestic and international institutional investors to our register. As well, it is encouraging to receive the support of existing investors and major shareholder Phillips 66, for the Company's strong growth agenda.
The ASX All Ords stock's CEO, Dr. Chris Burns, revealed that the funds will support its Anode Materials deliver on offtake agreements that were announced this month with Stellantis and Volkswagen's PowerCo business. He said:
We are pleased to have secured the funding required to support growth in the NOVONIX Anode Materials business following announcements this month of offtake agreements with both Stellantis and PowerCo. This funding will be used to achieve 3,000 tonnes per annum of production capacity at our Riverside facility in 2025 and enable continued access of our Department of Energy's Office of Manufacturing & Energy Supply Chains grant of up to US$100 million.
Despite today's sizeable decline, Novonix's shares are up 23% since this time in August.
