Namakwa Diamonds to raise US$ 55 mln following oversubscribed open offer

Namakwa Diamonds  shares rallied on the news that it expects to raise the full amount of funds expected in an open offer for new shares, that closed today.
The Africa-focused diamond firm said the share placing will raise US$ 55 million, pending shareholder approval at a special meeting this evening. The open offer was oversubscribed by 24.5 per cent.
The funds have been earmarked to repay debts and provide working capital for the company.
Repaying its debts now will mean the firm can avoid punitive interest rates and financial covenants Namakwa said.
Chief executive Richard Collocott explained that despite trading being in line with expectations, the group’s financial performance depends on the repayment of existing loans.
The firm outlined its fundraising plans at the start of June by offering just over 794 million new shares priced at 4.5 pence each.
Dealings in the new shares are expected to commence on the London Stock Exchange on 28 June.
At the end of May the company, which has its Kao mine in Lesotho and maintains alluvial operations in South Africa, said it had discovered an ‘exceptionally rare’ 11.36 carat pink diamond and a high value 44.47 carat diamond in the last financial year.
On the back of the news the share price was up 9.6 per cent to 4.44 pence.