Woodbois Ltd (LON:WBI) increased the size of its equity funding which has now closed, amid high demand the company raised £6mln up from £5mln.
It is issuing 100mln new shares priced at 6p each through a placing, share subscription and retail offer.
“We are pleased to have successfully closed this limited and oversubscribed fundraise,” said chief executive Paul Dolan.
“The raise will provide seed capital for our fledgling reforestation and carbon sequestration unit: this is a pivotal time in the development of the Voluntary Carbon Markets and we intend to leverage our experience and presence to help meet the rapidly growing corporate demand for high-quality emission offsets.
Dolan added: “These funds will also enable us to double our Gabon veneer production during H2 2021 and again during 2022, to broaden our forest concession footprint there as well as allowing us to generate value from our waste product through the production of blockboard.”
The equity funding was announced after market hours on Tuesday.
Originally, a total of £5mln was sought with a placing led by broker Canaccord along with a £1.4mln share subscription by the company’s largest shareholder Rhino Ventures.
Proceeds are earmarked for a push into the carbon sequestration market via a project to acquire and reforest degraded land in Gabon, plus other large scale reforestation projects. It noted talks with corporations that are looking to generate carbon offsets.
Funds will also help the company expand its forestry concessions, by acquiring 56,000 hectares close to its operations in Mimongo, Gabon.
It expects to enhance production capacity through the construction of infrastructure for a pair of veneer lines which are due online next year. Additionally, a blockboard line will be bought to utilise waste product and expand revenue potential.
Woodbois also noted its current trading highlighting a strong start to 2021 and said it remains on-track to turn cashflow positive and to deliver record revenues this year.
Revenue for the first quarter increased more than 44% on the prior three months as sawn timber and veneer production rose by 83% and 44% respectively.
The company said it expects higher activity levels in the second quarter though noted that the shipping remains tight amid Covid-19 restrictions.