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Labat ploughs ahead despite fund-raising hiccups

Labat share issue hit a pricing problem, but the company appears to have raised sufficient cash to pursue its expansion plans. Private venture capital company Verityhurst Limited has lent Labat funds instead of  taking equity, according to a SENS announcement on 21 October 2020.

The announcement does not specify any loan amount but says funds will be available on a draw-down basis and that Verityhurst has the option to convert its loan into equity by 30 August 2021. Labat was hoping Verityhurst would follow through on its subscription offer to buy 66 000 shares at R1.00/share but the listed company’s price is currently trading at less than half that price.

Nonetheless Labat is confident it is moving into the right space in the cannabis industry and the company will continue its bookbuild drive. It has moved one step closer to exiting the fossil fuels business by saying that its negotiating with a buyer to take over the division which is in business rescue.

Labat is moving purposefully into the southern African cannabis value chain. It plans to roll out 25 retail cannabis stores in South Africa and is upping its investment in cultivation in Lesotho and hoping for an Eastern Cape Licence.

 

Read our other stories about Labat

Labat raises R50 million for expansion

Labat deal worth over R2 Billion

 

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