Advanced material technology solutions designer, engineer and manufacturer Matrix Composites and Engineering (ASX:MCE) reports it has raised $7.485 million via a convertible note issued by Australian wholesale investment management company Collins Street Management.
The money that has been raised is expected to be used to bolster the company’s working capital position as it brings on new work generating strong revenue growth and advances its growth strategy.
The note has a value of $7.485 million, with a 3-year term to maturity and a 10.5% coupon rate and comes following the company securing the award of two ‘significant’ orders totalling about $30 million since June.
“The funding package will enable us to successfully deliver on our robust pipeline of current work and gives us financial muscle to target the next phase of business growth”
Commenting on the convertible note, Matrix Composites and Engineering Executive Officer, Aaron Begley says: “After diligent consideration of various funding options, we were pleased to reach this agreement with Collins Street who supports our long-term growth vision.
The ‘significant’ conversion premium is a tangible illustration of their confidence in our growth prospects and this new funding gives us a solid working capital headroom, whilst broadening our source of funding to minimise dilution and preserve value for all of Matrix’s shareholders.
The funding package will enable us to successfully deliver on our robust pipeline of current work and gives us financial muscle to target the next phase of business growth.”
Matrix also notes that the note is secured and convertible in full or part at the election of Collins Street at 35 cents per share, which represents a 64% premium to the company’s 14 day volume weighted average price of 21.3 cents per share.
In addition, the company expects to deliver ‘significant’ revenue growth in FY23 with year-to-date revenue and secured orders currently standing at $45 million compared to full year revenue in FY22 of $28.6 million.
The company has discretion to redeem the note no earlier than 6 months after the issue date but prior to maturity by repaying the outstanding amount at any time in full.
Matrix specialises in the design, engineering and manufacturing of composite and advanced material technology solutions for the civil and infrastructure, resources, oil and gas, defence and transportation industries. The company has gained a reputation as an industry leader in syntactic foam solutions and subsea buoyancy due to its 20 years of experience, while also becoming a major exporter of Australian goods and services with customers located worldwide.
Matrix announces it is also actively targeting additional opportunities across the traditional and renewable energy sectors.