Green Critical Minerals has locked in a $5.2 million underwriting agreement to support the exercise of its expiring options, reinforcing its commercialisation strategy for innovative VHD graphite technology.
- Entered $5.2 million option underwriting agreement with Aitken Mount Capital Partners and Canaccord Genuity
- Underwriting covers 236.8 million options exercisable at $0.022 each, expiring 12 October 2025
- Underwriters to receive 6% fee on the final underwritten amount
- Agreement includes standard termination clauses addressing regulatory and market risks
- Supports commercialisation of VHD graphite technology targeting thermal management markets
Underwriting Agreement Secures Financial Certainty
Green Critical Minerals Ltd (ASX, GCM) has taken a decisive step to underpin its near-term funding by entering into a $5.2 million option underwriting agreement with Aitken Mount Capital Partners and Canaccord Genuity. This agreement fully underwrites the exercise of 236.8 million quoted options, each exercisable at 2.2 cents, which are set to expire on 12 October 2025.
The underwriting arrangement means that if existing option holders do not exercise their rights by the expiry date, the underwriters will step in to subscribe for the shortfall shares, ensuring Green Critical Minerals secures the anticipated capital injection. This move provides the company with a solid financial foundation as it advances its commercialisation efforts.
Backing the VHD Graphite Commercialisation Strategy
Managing Director Clinton Booth highlighted the underwriting as a strong endorsement of the company’s strategy, particularly its focus on the proprietary Very High Density (VHD) graphite technology. This technology aims to disrupt the traditional heat sink market by offering superior thermal management solutions, a critical need in sectors such as electronics and electric vehicles.
With the underwriting in place, Green Critical Minerals can confidently progress towards delivering a high-quality product to customers demanding advanced thermal management. The capital raised through option exercises will likely support scaling production capabilities and further development of the VHD graphite technology.
Terms and Risks Embedded in the Agreement
The underwriting agreement includes a 6% fee payable to the underwriters, reflecting standard market practice. It also contains a comprehensive set of termination events that protect the underwriters from regulatory, market, and operational risks. These include adverse changes in law, regulatory investigations, significant market downturns, and material breaches by the company.
Importantly, the agreement stipulates that any shortfall shares issued to the underwriters will not require shareholder approval and will not count towards the company’s placement capacity, preserving flexibility for future capital raising initiatives.
Looking Ahead
While the underwriting provides financial certainty, the actual uptake of options by shareholders remains to be seen. The company’s ability to convert this capital into commercial success with its VHD graphite technology will be closely watched by investors and industry observers alike.
Bottom Line?
Green Critical Minerals’ underwriting deal sets the stage for a pivotal phase in commercialising its VHD graphite, but execution risks remain.
Questions in the middle?
- Will shareholders exercise their options ahead of expiry, or will underwriters absorb a significant shortfall?
- How soon can Green Critical Minerals translate the capital into tangible commercial contracts for VHD graphite?
- What impact might market or regulatory disruptions have on the underwriting agreement’s stability?