Origo has raised approximately USD30m, before commissions and expenses, by way of the placing of 82,200,000 new ordinary shares of GBP0.0001 each in the capital of the company.
The shares were placed with investors at a price of 25 pence per share.
Liberum Capital acted as broker to the placing.
The placing shares will be issued credited as fully paid and will rank pari passu with the existing ordinary shares, including the right to receive all dividends and other distributions declared in respect of such shares after the date of their issue.
The company will apply for admission of the placing shares to trading on AIM, a market of the London Stock Exchange. It is expected that admission will take place and that trading will commence on 17 June 2010. The placing is conditional upon, inter alia, admission becoming effective.
The net proceeds of the placing are intended to be used, in conjunction with Origo’s existing cash resources, to fund investment opportunities amounting to approximately USD50m.
This will include a seed investment of approximately USD10m in the Origo China Sustainable Development Fund, the launch of which was announced on 23 April 2010; Mongolian mineral resource investment opportunities amounting to approximately USD 20m; and investment opportunities in the Chinese cleantech and agriculture sectors amounting to approximately USD20m.
Origo has already identified and progressed to an advanced stage a number of new investment opportunities. In addition to the intended investment in the Origo China Sustainable Development Fund, the company has short listed six investment opportunities, the intended investment allocation to which totals USD40m, each of which are either subject to conditional purchase agreements or term-sheets.
The company currently has approximately USD20m of cash at hand, deployment of which is intended to be phased to meet the company’s operating cash costs for the next 18 months.
Origo has decided to pursue this fundraising so it can capitalise on the significant investment opportunities it has developed during 2010. The company’s strategy is focused on progressing China-centric investment and business development opportunities which use its China-based team and China-specific skill sets, as well as capitalising on the Mongolia presence it has built up.
The Origo China Sustainable Development Fund, a RMB-denominated private equity fund to be managed by Origo, in partnership with the Xinxiang Municipal Government, is intended to be the first RMB fund in a new series of funds for Origo in the domestic Chinese market. It will expand the company’s ability to gain exposure to China opportunities where the likely preferred exit is via the domestic stock markets.
Origo has developed and expanded its Mongolian presence since the company’s investment in Gobi Coal and Energy in November 2009, in order to take advantage of the opportunities in a largely unmapped country with significant resource potential geared towards meeting China’s demand for natural resources. Origo’s efforts have yielded current opportunities for direct investments, primarily in exploration-stage mining assets, as well as the potential to develop an investment banking advisory service and other new partnerships in Mongolia.
Chris Rynning, Origo Partners chief executive, says: "The funds raised from the proposed placing will enable Origo to launch its first RMB fund which will significantly enhance our platform for investing and realising value on the Chinese mainland. We will also be able to capture recent mining and clean technology opportunities in China and Mongolia which our team have identified and progressed.”
