Pearl Global raising $6m

Tyre recycler Pearl Global is raising $6.5 million to expand its Queensland processing facility and provide working capital, after announcing a $9.2 million loss on Monday.

Pearl Global has received commitments to raise $5 million through the placement of 55.6 million shares at 9 cents per share to institutional, sophisticated and professional investor clients of Bell Potter Securities, which is lead manager to the issue. 

The company’s major shareholder ROC Asset Management will buy a further $1.5 million worth of shares to maintain its stake in the business, subject to shareholder approval in December.

According to a statement on the ASX, the funds will be used to expand its Stapylton facility including for the construction of an additional thermal desorption unit, more shredding and rubber crumbing equipment, and the establishment of in-house maintenance.

The money will also be used to cover the costs associated with the ongoing expansion of production, the cost of the placement and working capital.

The capital raising comes as the company released its annual report yesterday.

Revenue has increased from $173,226 in 2019 to $1.9 million in 2020, mainly due to $1.5 million of fees for collection of end-of-life tyres.

Sales from oil derived from tyres was $294,809, up from $125,152 last year, and the company sold $89,732 of recycled steel, an increase from $12,099 in 2019.

The company made a loss of $9.2 million after tax.

It is the fourth capital raising the company has undertaken this year, raising $5 million in June and $2.16 million in March to expand its Queensland plant and $1.63 million in February to acquire Australian Tyre Processors.  

The company is aiming to convert used tyres into fuel oil, carbon char, clean gas and steel at its Queensland plant.

Shares in Pearl Global closed 1 per cent down at 9.3 cents.