Alexium’s $6.77M Rights Issue Underwritten by Major Shareholders to Repay $4.6M Loans

Context and Capital Raising

Alexium International Group Limited (ASX, AJX), a specialty chemicals company, has launched a pro rata non-renounceable rights issue aimed at raising approximately AUD 6.77 million. The offer, priced at $0.006 per new share, invites eligible shareholders to subscribe for 3.4414 new shares for every 5 shares held as of the record date. The rights issue opens on 23 December 2025 and closes on 16 January 2026.

This capital raising is a strategic move to strengthen Alexium’s balance sheet by repaying significant shareholder loans and funding a key acquisition. The offer is fully underwritten by major shareholders and directors, including Colinton Capital Partners Pty Ltd and Wentworth Williamson Management Pty Limited, who have also provided substantial shareholder loans to the company.

Shareholder Loans and Underwriting

Between late 2024 and late 2025, Alexium secured shareholder loans totaling over AUD 4.6 million from Colinton Capital Partners and Wentworth Williamson to support working capital during challenging market conditions. As of 12 December 2025, the outstanding loan balances stand at approximately AUD 4.1 million and AUD 0.5 million respectively.

These lenders, who are also significant shareholders, will offset their entitlements under the rights issue against the outstanding loan amounts. This arrangement reduces the company’s debt while simplifying the repayment process. The underwriting commitment from these parties ensures the company will raise sufficient funds to meet its objectives, with no underwriting fees payable.

Microtek Acquisition and Use of Funds

Alexium has agreed to acquire Microtek Laboratories, Inc.'s microencapsulation for Phase Change Materials business, including associated technology and inventory. Completion of this acquisition is conditional on the successful completion of the rights issue and repayment of shareholder loans.

The acquisition consideration involves issuing shares to Microtek equal to 11.56% of the company’s shares on issue post-offer. Funds raised will be allocated primarily to repay shareholder loans (68% combined), cover acquisition transaction expenses (2%), and provide working capital (29%).

Impact on Shareholding and Control

The rights issue will significantly increase Alexium’s share capital, with approximately 1.13 billion new shares to be issued, raising the total shares on issue to over 3.1 billion post-acquisition. Shareholders who do not participate risk dilution of around 40%.

The underwriting arrangement means that if other shareholders do not fully subscribe, the underwriters’ voting power could increase, with Colinton Associates potentially holding up to 56.5% and Wentworth Williamson Associates around 10.5% of voting power post-offer and acquisition. However, if all eligible shareholders participate, the underwriters’ voting power would be diluted accordingly.

Risks and Considerations

The offer document highlights several risks, including the company’s going concern status, regulatory compliance, intellectual property protection, and market competition. The company’s financial report notes material uncertainty regarding its ability to continue as a going concern without successful capital raising.

Investors should also consider the speculative nature of the investment, potential dilution, and the company’s reliance on sourcing raw materials and successful integration of the Microtek acquisition.