FURNITURE supplier Style Plantation has received commitments of about $600,000, mainly from professional investors, to its proposed placement.
The funds from that placement have been primarily earmarked for building the company’s inventory to about $1 million.
The company has also received an in principle agreement from the Agricultural Bank of China to a bank facility to allow Style’s Chinese entity Anji Ya Feng to move to produce one million square metres of the strand woven product Style Board.
Ya Feng has finished a new factory in Wannian, funded by the Style Plantation initial public offering receipts and has finished building the exterior of the new factory at Anji.
Those factories will lift its production to 600,000 square metres a year.
With the bank facility Ya Feng has bought another factory at Guixi and construction will start shortly.
That facility will lift production to the million square metre mark.
Style Plantation managing director Greg Johnson said the company had been overwhelmed with orders from franchisees and the company had decided to increase its Australian inventory rather than rely on expedited shipments from Ya Feng.
"Rather than burdening our emerging company with a stock financing facility for the increase in inventory, and rather than exposing our company to risks of transport delays, the board believes it is desirable to fund such increase via a placement," he said.
The $600,000 raising will be in two stages. The first stage, already completed, has involved the placement of two million shares and two million options to raise $400,000.
The second stage is due to occur in about six weeks’ time through a prospectus to raise at least $200,000.