Edenville shares tumble as group undertakes discounted placing
Exploration and development firm Edenville Energy has undertaken a placing to raise gross proceeds of £400,000 in order to provide the group with additional working capital, settle outstanding creditors and provide sufficient funds to meet any unexpected adverse judgement as a result of ongoing legal claims.
Edenville said on Tuesday that the placing proceeds were "sufficient" to ensure it becomes cash flow positive from operations in the coming months, subject to being able to operate during Tanzania's rainy season.
The AIM-listed company placed 5.71m new ordinary shares at a price of 7.0p per share, representing a discount of approximately 33.3% to the stock's mid-market closing price of 10.50p on Monday.
The placing was arranged by Tavira Financial, the company's broker, and will represent approximately 21% of the firm's enlarged issued share capital.
Edenville, which hopes to resolve an ongoing dispute with Upendo Group "in the coming weeks", also revealed that it had received a claim from former employees relating to unfair dismissal as a result of Covid-19 but stated that based on legal advice received, it confirmed that both claims were being "robustly defended".
As of 1125 GMT, Edenville shares had tumbled 22.67% to 8.12p.
Reporting by Iain Gilbert at Sharecast.com