ASX-listed biofuel technology company Algae.Tec has announced the launch of a new rights issue, to raise around $2.4 million towards the development of an algae pilot plant in India.
Algae.Tec announced on Friday it had signed an immediate agreement with its largest partner – Reliance Industrial Investments and Holdings Limited – to raise $A1.4 million via the issue of 20 million shares at $0.07 cents per share, on top of issuing 14,285,714 options to subscribe for shares at $0.07 cents per share.
RIIHL must exercise 7,142,857 of these options 5 months after 18 December 2014 and subsequently 10 months after 18 December 2014.
Algae.Tec says the proceeds will be used to provide additional working capital to speed up development of an algae pilot plant in Jamnagar, India, utilising Algae Tec’s technology for the creation of biofuel.
“The new funding agreement with our large-scale partner allows us to build on the significant progress we have made to date,” said Algae.Tec managing director Peter Hatfull.
“Our algae technology continues to deliver the goals of fuel efficiency and cost savings to our customers.
“This raising provides us with the funds to allow the plant to be fully operational in 2015.”
Hatful said the company would continue to seek similar funding opportunities as it continued to grow its global biofuels division.