Phoslock Water Solutions Limited (ASX:PHK) Successfully Raises Capital To Fund Chinese Expansion And Reduce Debt

Sydney-based Phoslock Water Solutions Limited (ASX:PHK) just raised $4.6 million from institutional and high net worth investors in Australia and overseas through a highly oversubscribed share placement. PHK sells its natural product Phoslock, which is used to control algae in water bodies by locking phosphate, in multiple countries. After losing most of its value between 2008 and 2015, company shares have more than tripled over the past two years and a strong institutional demand at this price indicates significant confidence in the company’s growth. PHK, currently valued at $79 million, said it will use the capital to increase liquidity and build inventory stock. Primarily, the funds will be used to expand sales and marketing in China. The company said it will also substantially reduce its debt, which stands at $1.8 million. ASX:PHK Phoslock Water Solutions Income Statement by Simply Wall St PHK is still a loss-making company, but revenue has increased nearly four times in two years and China appears to be the key catalyst behind investors’ enthusiasm for the stock. “This placement and the equally priced SPP provides us the necessary working capital to greatly expand the business… Already we are tendering for substantial projects and our pipeline is growing”, said Chairman Laurence Freedman. “The recent expansion into China, involving establishing a new expanded manufacturing facility, the setting up of Phoslock Chinese corporations and the recruitment of some 50 employees has transformed the Company”, he added. PHK shareholders, who held shares as of 19 September with a registered address in Australia and New Zealand, can purchase up to $15,000 worth of shares at the same price, 17.5 cents, offered to institutional investors — PHK shares last changed hands at 18.5 cents. Find more companies like PHK in Super Growth