MGC Pharma swamped in Cannabis capital raise

You might be forgiven for thinking commodities such as gold and Lithium are hot right now but MGC Pharma were literally knocked over in the rush during their recent medical cannabis capital raising.

They went to market for just $3.5m at 4.4c a share  but received $11m worth of bids into their book which was being managed by Sanlam Private Wealth Pty Ltd.

The company has elected to accept just $5m worth of bids potentially creating some on market demand for the stock.

A $2m share purchase plan on the same terms will allow existing shareholders to also participate in parcels of up to $15k at the same price of 4.4c a share.

The issue price represents a 19% discount to the last traded price of 5.4c a share and a 21.5% discount to the 5 day volume weighted average price.

All shares subscribed for will include one free listed option for every three shares purchased with a strike price of 6.5c and expiry on the 30th of June 2019.

MGC will now be very well funded to significantly ramp up their medical cannabis operations in both Slovenia and The Czech Repulic.

Monies raised will be partly used to fund the operations of recent Czech Republic acquisition Panax Pharma who has the right to access a 1000 square metre plot of growing space in the revered Vukoz Research Institute created by the Czech Ministry of the Environment.

The construction of the company’s Slovenian CBD growing facility will now be fully funded as will the company’s research laboratory and CBD extraction facility.

MGC will now also be fully funded to complete the roll out of their first 50 cannabis based skin care products from their Slovenian joint venture setting them up for near term revenues.

MGC Pharma will now have the best of both worlds. Their medical cannabis research and development efforts will now be significantly ramped up but they will be underwritten financially to some degree by their cannabis based skin care line which will start to produce revenues very quickly.

The ability to undertake expensive medical research whilst being underwritten by an income stream may ultimately limit the amount of capital required to be raised in MGC Pharma and might explain why they were knocked over in the rush this time around.

Co-founder and Managing Director of MGC Pharmaceuticals Nativ Segev said “We are delighted to have received very strong support from new and existing shareholders for our fundraising. MGC Pharmaceuticals continues to make excellent operational progress in Europe and is well positioned to become a leading player in the Australian medical cannabis industry. This capital raise will allow us to continue to create shareholder value in the exciting and fast changing medical cannabis industry.”



Add your comment

Share Price

Closing price for the last 90 trading days
Powered by Morningstar ®

Top 10 Shareholders

Substantial shareholders as published in the annual report.
Powered by Morningstar ®