Carbon Revolution, which is back on the Australian Securities Exchange after freezing share trading for three days, said that to help shore up expected revenue falls it has successfully completed a $25 million share placement designed to combat the production effects of the COVID-19 crisis.
The company will also undertake a non-underwritten share purchase plan capped at $3 million, raising a total of $28 million.
In a statement to the ASX, Carbon Revolution said the virus has also affected company staff levels.
It said news that the outbreak had affected its customers has moved it to “cease recruitment activity related to our plan to increase production volumes in order to minimise the risks of COVID-19 infections from increased human contact through the recruiting and hiring process”.
This decision will trim sales volume in the current financial year and the company now expects total revenue for 2019-20 to be “approximately 87 per cent of the FY20 prospectus forecast, or approximately $54 million”.
“This is a significant reduction but remains a 260 per cent increase on the prior year,” the company said in the statement.
“The company now does not expect to become EBITDA positive during FY20 and now forecasts EBIT for FY20 to reduce by approximately $5 million compared with the FY20 prospectus forecast.”
The forecast presumes customers would continue to purchase wheels, that there are no negative impacts on the supply chain and that production does not need to be stopped or further constrained.
Carbon Revolution halted share trading on March 16 and resumed on March 18 as it organised the share placement.
The fundraising comes four months after Carbon Revolution listed on the ASX, raising $90.1 million at $2.60 a share. Shares are now trading at about $1.45.
By Neil Dowling
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