AJ Lucas to raise funds

AJ Lucas is carrying out a three-for-eight pro-rata accelerated non-renounceable entitlement to raise the funds, with the price of the entitlement offer set at A$0.21 per share. This is a 16% discount to the company's last traded share price of A$0.25 per share on 11 March.

AJ Lucas said Thursday it had already received firm commitments from its two largest shareholders, while Patersons Securities has agreed to underwrite the shortfall.

It added Patersons had also obtained sub-underwriting support from AJ Lucas' largest shareholder, Kerogen Investments, and certain new institutional investors.

Kerogen has committed to subscribe for its pro-rata entitlement, which will raise A$11.1 million, and sub-underwrite A$2.9 million in total to support the entitlement offer.

The combination of the shareholder commitments and underwriting of the shortfall is equal to the gross proceeds intended to be raised under the entitlement offer, according to AJ Lucas.

"We believe it is in the interests of all shareholders to support the capital raising and we are pleased with the binding commitments we received so far,” AJ Lucas chairman Phil Arnall said.

“This capital raising is the first step in a broader strategy to provide financial flexibility to enable AJ Lucas to manage its debt obligations and future commitments for the Cuadrilla shale gas project."

AJ Lucas will use the money raised in the entitlement offer to partially repay amounts due and payable under the Kerogen senior secured and short term loans and to provide funds for short term general working capital purposes.