Carbon Revolution rushes to raise $25 million in virus response

When the going gets tough, the tough get going.

Only a few months after listing carbon fibre composite automotive wheel manufacturer Carbon Revolution has completed a rushed $25 million capital raising.

The company completed a non-underwritten institutional share placement ‘to position the company as strongly as possible to deal with the impacts on the business associated with the COVID-19 virus outbreak.”

Carbon Revolution told investors that the virus was now affecting motor vehicle manufacturers, with its customer, Ferrari announcing it would cease production for a two week period.

The company also announced a $3 million share purchase plan, a tactic which normally supports a company’s share price.

It will also freeze recruitment, and hence its production ramp up, ‘in order to minimise human contact during the recruitment process.’

Numerous young companies have seen their share prices dive in recent days, with a low price hampering their ability to raise capital in a cost-effective way.

Carbon Revolution appears to have escaped that trap.

The first hint Carbon Revolution, which listed in November, was planning its move came on Monday with a one paragraph statement announcing a trading halt.

Then the company released an update of its 2019 prospectus.

On Tuesday the company did not answer questions put to it in writing by @AuManufacturing news.

Then today Carbon Revolution announced it had been monitoring the spread of the coronavirus and the actions it was taking.

Carbon Revolution said the effects of the hiring freeze will cut its revenue forecast for the year to 87 per cent of its original prospectus level.

“To put the company in a stronger position to manage through this uncertain period we have elected to strengthen the company’s balance sheet through this capital raising.

“This action will enable carbon Revolution to continue to grow with greater security in relation to funding working capital and securing key raw materials.”

Picture: Carbon Revolution

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