Eddie Stobart Logistics PLC (LON:ESL) said it has raised £9mln through a share placing and subscription which it says will satisfy the fundraising requirements to covert itself into an investment company.
The AIM-listed cash shell also said it will be making an open offer to qualifying shareholders to raise an additional £7mln on the same terms as the placing and subscription.
Overall, the company is planning to raise up to £16mln through the issue of around 320.3mln new shares at a price of 5p each, a 37.5% discount to its closing price on Tuesday.
Stobart said that the £9mln raised already is more than the required minimum of £6mln needed to complete its conversion to an investment firm, adding that as part of the process it will also change its name to Logistics Development Group PLC.
The firm said the name change will “help to create an appropriate distinction between the company and its investments, removing current confusion, and will be reflective of the company’s status as an investing company with a focus on the logistics sector”.
Meanwhile, the company said the proceeds of the fundraising will be used to meet its working capital requirements and undertake due diligence on potential acquisition targets.
“We are pleased to have conditionally raised £9mln, more than meeting our previously-announced technical requirement to raise £6mln to complete our conversion to an AIM investing company.
“Today we have also announced that we intend to change the name of the Company to Logistics Development Group plc. This marks our transition to a growth-focused investment vehicle whilst further delineating the Company from the Eddie Stobart business, in which we hold an indirect interest and which, as previously announced, has returned to profitability and firmly put its past challenges behind it”, chairman Adrian Collins said in a statement.
The company’s shares surged 18.4% to 9.5p in early trading on Wednesday.