French orthopedic implants manufacturer IMPLANET is planning a capital raise of between €5.5m and €6.6m, potentially increasing by 15% under certain conditions, as per the company's press release on September 28, 2023. This capital raise involves issuing preferential subscription rights to all shareholders, following new authorization expected at a General Meeting set for November 16, 2023.
The implementation of this plan is slated for January 2024, pending the fulfillment of various precedent conditions. Shanghai Sanyou Medical Co., Ltd, which holds a significant 41.03% stake in IMPLANET through its subsidiary Sanyou (HK) International Medical Holding Co., Ltd, has pledged a €5m cash subscription on both an irreducible and reducible basis. This commitment is subject to several conditions being met.
The proposed operation is eligible for PEA-PME equity savings plans and requires waivers from the AMF French stock market authority under articles 234-8 and 234-9, 2° of its General Regulations. Additionally, approval from Chinese government authorities is necessary to prevent crossing the post-transaction 50% capital or voting rights threshold.
InvestingPro Insights
Implanet's decision to raise capital comes at a time when the company is grappling with significant financial challenges. According to InvestingPro, the company operates with a substantial debt burden and is rapidly burning through cash. This is reflected in the company's negative P/E ratio of -0.43 and the adjusted P/E ratio of -0.65 for the last twelve months as of Q2 2023.
InvestingPro data also reveals that Implanet's revenue growth has been decelerating, with a growth rate of 6.97% for the last twelve months as of Q2 2023. This slowdown, coupled with the company's inability to turn a profit in the past year, has led to a significant decline in the stock's performance. In fact, the stock has fallen by 71.89% over the past year.
Despite these challenges, InvestingPro's fair value for Implanet's stock stands at $0.08, slightly higher than its previous close of $0.06. This suggests that the stock might be in oversold territory, as indicated by one of the InvestingPro Tips.
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