Key Petroleum has completed the first tranche of its share placement, raising nearly AU$59,000, but the second tranche faces a setback as the original subscriber withdraws. The company is actively seeking new investors to complete the capital raise by mid-March.
- 3% placement tranche issued, raising AU$58,887
- Original subscriber withdraws from remaining 13% tranche
- Company pursuing alternative sophisticated investors
- Funds earmarked for asset acquisition, development, and working capital
- Placement complies with Corporations Act disclosure exemptions
Placement Progress and Setback
Key Petroleum Ltd (ASX: KEY) has announced the successful issuance of the first tranche of its recent share placement, issuing just over one million shares representing 3% of its issued capital. This tranche raised approximately AU$58,887 at an issue price of 5.8 cents per share. The company noted a slight delay in settlement due to administrative and banking processes coinciding with the Chinese Lunar New Year holiday, but funds have now cleared.
However, the momentum was tempered by the withdrawal of the original subscriber for the second tranche, which would have accounted for 13% of the company’s issued capital. The withdrawal was reportedly for reasons unrelated to Key Petroleum, leaving the company to seek alternative investors to complete this significant portion of the placement.
Strategic Use of Funds
Despite this hiccup, Key Petroleum remains committed to its strategic plans. The funds raised from the placement are intended to support the acquisition of assets with development upside, maintain and develop existing assets, and provide working capital. These initiatives align with the company’s broader growth ambitions in the oil and gas exploration sector.
The company is actively engaging with sophisticated investors to fill the gap left by the original subscriber, aiming to complete the placement by around 19 March 2026. This timeline suggests a proactive approach to securing the necessary capital to maintain operational momentum.
Regulatory Compliance and Market Implications
Key Petroleum has confirmed that the placement shares were issued under exemptions provided by the Corporations Act 2001, specifically section 708A, allowing the company to raise capital without a full disclosure document. This compliance ensures that the placement process adheres to regulatory standards while facilitating timely capital raising.
Market watchers will be keen to see how the company manages to attract new investors for the remaining tranche and whether this will impact the share price or investor confidence. The withdrawal of a significant subscriber, even for reasons unrelated to the company, introduces an element of uncertainty that will require careful navigation.
Bottom Line?
Key Petroleum’s ability to secure new investors for the remaining placement tranche will be pivotal in sustaining its growth trajectory.
Questions in the middle?
- Who are the potential new investors being targeted for the remaining 13% tranche?
- What specific assets is Key Petroleum eyeing for acquisition with the raised funds?
- Could the subscriber withdrawal signal broader market hesitancy towards the company’s sector?