Eden Innovations Targets $6.6M in Rights Issue After 20-for-1 Share Consolidation

Capital Restructure and Debt Reduction

Eden Innovations Ltd (ASX – EDE) has announced a significant capital restructure aimed at strengthening its balance sheet and supporting the commercial rollout of its key products, EdenCrete® and OptiBlend®. Central to this plan is a proposed 20-for-1 share consolidation, designed to reduce the number of shares on issue and create a more efficient capital structure.

Alongside the consolidation, Eden plans to undertake a renounceable pro-rata entitlement offer on a 1-for-2 basis, priced at four cents per new share post-consolidation. This offer includes one free attaching option for every two new shares, exercisable at eight cents within two years. The entitlement offer aims to raise approximately $6.6 million before costs, providing vital working capital for the company’s ongoing global expansion efforts.

Loan Repayment and Director Participation

A key feature of the restructure is the planned repayment of nearly $5 million in shareholder loans from entities controlled by directors Gregory Solomon and Douglas Solomon. The company intends to issue shares at the entitlement offer price to repay these loans, subject to shareholder approval at the upcoming general meeting scheduled for July 22, 2025.

Notably, both directors and their related entities have committed to fully participate in the entitlement offer up to their full entitlements, amounting to approximately $2.6 million. This participation signals confidence from Eden’s leadership in the company’s strategic direction and financial outlook.

Shareholder Meeting and Timetable

Shareholders will be asked to approve the share consolidation and loan repayment at the general meeting. If approved, the consolidation will take effect on July 29, 2025, with the entitlement offer prospectus expected to be lodged with regulators by August 11. The offer will open mid-August and close by the end of the month, with new shares expected to rank equally with existing shares and be quoted on the ASX shortly thereafter.

The company also plans to appoint a nominee to sell rights on behalf of foreign shareholders who are ineligible to participate, ensuring compliance with regulatory requirements.

Outlook and Strategic Implications

This capital raising and debt repayment initiative is a pivotal step for Eden Innovations as it seeks to solidify its financial footing and accelerate the commercialisation of its innovative construction materials and fuel systems. By reducing debt and bolstering working capital, Eden positions itself to better compete in global markets and support ongoing product development.

While the restructure depends on shareholder approval and successful subscription to the entitlement offer, the involvement of directors in the capital raise provides a positive signal to the market about the company’s prospects.