Tirupati Graphite has announced a placing with institutional and other investors of 11,111,111 ordinary shares of £0.025 each in the Company at a price of £0.90 per Placing Share to raise an aggregate gross amount of £10 million.
The Placing Price represents a discount of 8.6% to the closing price of £0.985 on 15 April 2021.
Certain directors of the Company are subscribing for shares pursuant to the Placing. Christian Dennis is subscribing for 111,111 Placing Shares at the Placing Price and Lincoln Moore and Rajesh Kedia are each subscribing for 11,111 Placing Shares at the Placing Price.
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The Placing is conditional only on admission of the Placing Shares to the Standard Segment of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange, with such admission and trading expected to become effective at 8.00 a.m. on 20 April 2021.
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The net proceeds of the Placing will primarily be used to expedite the Company’s modular medium-term development plan (‘MTDP’) to take advantage of the strong market demand for its products and to:
- Accelerate development of the next 18,000 tpa module at the Sahamamy primary flake graphite project in Madagascar which has all requisite approvals in place. Total capacity across both Madagascan projects is anticipated to be 30,000 tpa by Q1 2022, a ten-fold increase since the Company’s admission to the Official List in December 2020.
- Redevelop hydro power facilities at Sahamamy to meet the power requirements of current operations through renewable energy and carry out a feasibility study for c.900-kilowatt of additional hydro power facilities to meet most of the power requirements for the anticipated 30,000 tpa capacity.
- Increase capacity of the Company’s downstream specialty graphite projects from 1,200 tpa to 16,200 tpa by H1 2022 with the setup of an integrated, multi-product 15,000 tpa Speciality Graphite Project with throughput and product capabilities consisting of:
o 3,000 tpa expandable/intercalated graphite products;
o 3,000 tpa spherical graphite for Lithium batteries;
o 3,000 tpa micronized graphite for high-tech specialty applications including lubrication, polymers, and composites; and
o 6,000 tpa high purity flake graphite for graphene and other high purity graphite applications.
Enable fast-track installation of industrial scale graphene manufacturing capabilities at the Graphene & Technology Centre to capitalise on near-term commercialisation opportunities, and for general working capital purposes.
Shishir Poddar, CEO of Tirupati Graphite, said, “We are delighted to have received such strong support in completing this oversubscribed placing, which further strengthens our confidence in our strategy and enables us to fast track our development plans to fulfil the increased demand for our graphite products.
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“Having developed a suite of graphite products spanning a variety of applications, utilising our unique sustainable processes and technologies, we are ideally positioned to competitively support the fast-emerging green graphite supply chain. The potential green economy applications for our graphite products provides us with the opportunity to play an important role in the global efforts to reduce carbon emissions and the impacts of climate change.
“With increasing global adoption of electric mobility, we are confident that the timing is opportune for us to expedite our developments.
“The World Bank Group has stated that the supply of graphite will need to increase by nearly 500% by 2050 to support the clean energy transition, while UBS increased its EV penetration estimate from 4% currently to 20% of the market by 2025, and 50% by 2030.
“This translates to a 22x increase in battery requirements over the decade which will see natural flake graphite demand growing by 700% to roughly 5.9Mtpa, according to the Swiss investment bank.
“We believe the commercialisation of graphene applications is on the cusp of rapid growth as well, with the market size forecast to breach the billion-dollar mark over the next two to three years.
“Moreover, the promulgation of the first international ISO standards for graphene is testimony to the forthcoming opportunities which we believe should boost adoption by end users.
“The progress we have made within our graphene division is particularly exciting and we are poised to deliver ISO standard graphene on a commercial scale to buyers in the aerospace, defence, battery storage, electronics and other key sectors working on graphene-based applications.
“Furthermore, there are several other diverse industries and applications sectors such as flame retardants, thermal management and composite materials which provide multiple growth streams for the Company.
“This is an exciting period for Tirupati and, with this in mind, I look forward to providing further updates on our progress and growth as we look to maintain our positive momentum.”