Defence manufacturer Electro Optic Systems (EOS) has completed a $60 million placement to secure funding for the fulfilment of an arms supply contract worth $410 million.
The placement of two tranches of more than 20 million shares was oversubscribed and has received strong participation from new and existing shareholders.
Shareholder approval is required for the second tranche worth 10,147,123 shares, with a general meeting scheduled for March 13.
A share purchase plan (SPP) will also give existing shareholders an opportunity to buy into new shares at the same price of $2.91 per share.
EOS now has more than $580 million worth of orders for its new R-400S-Mk2 weapon system, which is expected to create 200 jobs by 2020 at its production facility in Canberra.
The weapon system was initiated in 2005 under a US Army contract to develop next-generation arms.
“This placement will allow EOS to forge ahead with the execution of all its current contracts and provides a stronger capital base for further expansion to meet growing demand,” said CEO of EOS, Dr Ben Greene.
“For future defence export sales, EOS plans to extend its relationship with Efic in the area of working capital support.
“No significant outlays of a capital nature are required to grow EOS business on its current trajectory.”