DUG Tech raises $15m

Supercomputing business DUG Technology has raised funds from a discounted share placement to expand into the military, space, and renewables markets.

Today, DUG announced it had received commitments to raise $15 million from a two-tranche placement and would seek a further $5 million from a share purchase plan, with both offers priced at 90 cents a share.

It represents a 12 per cent discount to the company's closing price before it entered a trading halt on Friday and a 33 per cent discount to the $1.35 from DUG's initial public offering in July last year.

Matthew Lamont-led DUG said the proceeds would be applied to military and space business development, as well as renewable initiatives, global sales team development, computer equipment, and working capital.

“This is an important step in DUG’s journey,” Mr Lamont said.

“Our software business line has had a great year growing significantly.

“HPCaaS [high-performance computing as a service] has been the star of the show with terrific growth and opportunities that have proved up this technology business line.”

DUG recently announced a number of new HPCaaS contracts, including with Henderson-based shipbuilder Austal.

Mr Lamont said DUG had been affected by COVID-related uncertainty and delays in project awards this past financial year, but maintained a positive outlook for the business.

“DUG is in a great position to capitalise on growth opportunities in FY22,” hesaid.

The company will issue 14.9 million shares through the first tranche of the placement and 1.8 million through the second, with Canaccord Genuity acting as lead manager.

DUG will seek shareholder approval for tranche two – along with shares subscribed for by its directors – at an annual general meeting on October 14. The SPP is expected to close on October 13.

The West Perth-based company was trading 5.8 per cent lower at 3:25pm AEST to 97 cents a share.