CollTech raises $2.27m in placement

Western Australian collagen purification company CollTech (ASX:CAU) has raised $2.27 million after fees from its recent private placement and share purchase plan.

The share purchase plan closed oversubscribed on September 2, with the directors having to scale back applications by 30 per cent. "We had a good response from our existing shareholder base," said CollTech CEO Michael Pixley.

CollTech also completed a placement of approximately 1.6 million shares at 9.5 cents per share to domestic investor Challenger Financial Services and US-based Nite Capital.

"We only reserved half of what we were raising for placement groups and that was snapped up and then we left the rest for shareholders," said Pixley. "It was done at a fairly reasonable price. I think everybody got a chance."

Pixley said that the capital raised will not be used for research and development but "to advance the quality assurance modules and some more equipment to enhance our move into research and medical grade collagen, which is far higher value add."

The capital raising was managed by BBY Limited.

CollTech's shares were trading at $0.125 at press time.