Crossject announced it would issue new shares, a maximum of 3.4m with subscription rights, to be listed before year-end (28 December), with total potential proceeds of c.€3.9m.
In short, the subscription period will be 3-14 December. Three subscription rights will give the right to subscribe to one new share at €1.16, thus a theoretical price for subscription rights of €0.14 based on yesterday’s closing price. Gemmes Venture, the historic and main shareholder of Crossject, has committed itself to subscribing a number of shares of at least 24% (its stake in Crossject) and enough shares to ensure that 75% of the issue is subscribed in any case, with the possibility to subscribe up to 100% of the issue or enough shares to ensure that 100% of the issue is subscribed. The group also indicates that its financing needs post this capital increase are €11m over the next twelve months, to be covered by incentives, tax credits and the commercial agreements currently being negotiated (upfront fees). If these financings are not enough, it is also considering and negotiating non-dilutive financings. Altogether, the announcement implies that the total number of shares will rise from c.9.3m to c.12.7m, while the net debt will decrease by c.€4m, if the issue is 100% subscribed.
We will integrate the issue in our model, with a target price that will go down since the impact of the dilution is undoubtedly greater than the positive one on the group’s net debt level. That said, the short-term visibility will increase and management can focus on the ongoing commercial agreements, which we see as positive news.
