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Agricultural technology company Rubicon Water is planning to raise $18 million to capitalise on a growing pipeline of international projects with more than half of the raise being supported by the board and key management personell.
A fully underwritten placement of 64 million Rubicon shares at 25c each, accounting for $16 million of the raise, has already been taken up by new and existing institutional investors as well as high net worth investors.
The price has been struck at a 22 per cent discount to Rubicon’s previous closing price of 32c, with today’s announcement leading to an 18.6 per cent drop in the share price to 26c at 11.20am (AEST).
Up to $9.2 million of the raise is being taken up by all of Rubicon's directors as well a key management personnel, subject to shareholder approval.
The Melbourne-based water management technology company is also planning to raise a further $2 million via a share purchase plan, which will not be underwritten.
“We are delighted with the support we have received from new and existing investors, which demonstrates confidence in our near-term global growth opportunity,” says Rubicon CEO Bruce Rogerson.
“Having worked through the challenges of recent years, we are sharply focused on leveraging our established long-term customer relationships in key markets and delivering on Rubicon’s significant and exciting project pipeline over the coming months and years.”
Rubicon Water provides a suite of hardware products and irrigation management software known as NeuroFlo, that are designed to revolutionise water management in gravity-fed networks.
The company’s flagship Total Channel Control Network Control solution integrates smart automated equipment, such as control gates, flow meters, and radio technology, enabling autonomous operation of open canal distribution networks.
Rubicon’s FarmConnect surface irrigation automation technology transforms traditional manual on-farm surface and flood irrigation practices by improving application efficiencies and reducing labour requirements while maximising yield potential.
Rubicon announced last month that it had made significant progress across its US operations with a record of $33 million in orders secured in FY24 - or triple the $11 million recorded in FY23.
The latest figure comprises 130 separate orders from 77 different customers, including a major FarmConnect contract that the company says is the start of a comprehensive initiative to eventually automate the entire surface irrigation operations for one of California’s largest Alfalfa producers.
The company is looking to expand further into emerging geographies, including North America, offset against significant slowdowns in key Chinese markets for irrigation automation.
Proceeds from the placement will be used to cut Rubicon’s existing bank debt and drawn director loans.
The company says it will also bolster working capital and provide adequate funding to support growth opportunities.
Rubicon is undertaking a strategic review of its Chinese operations with the company reversing previously recognised revenue attributed to delayed China projects.
This has led to lift in inventory of about $3 million, which Rubicon says has already started to be redeployed to other projects “where it can be utilised and monetised more quickly”.
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