Strong Uptake of Progen Options
Brisbane, Australia Tuesday 7 June 2005 Progen Industries Limited (ASX: PGL, NASDAQ: PGLAF) announced today that there was a strong uptake by option holders of the listed options that expired on 31 May 2005. A total of 3,516,022 options were underwritten by Emerging Growth Capital Pty Limited (eG Capital). Participation was strong amongst option holders with 2,297,007 options being taken up.
Participation in the option issue from Australian based investors was strong, with a take up rate of approximately 80%.
The shortfall of 1,219,015 options (34.7%) will be placed with a small number of existing institutional investors, who have been long-term supporters of Progen. Mark Fordree, Managing Director of eG Capital commented that the shortfall was about 3-4% higher than estimated prior to signing the Underwriting agreement but reflected a normal take up rate for this type of exercise. He said "This was an outstanding result given the current volatility in the biotech sector both in Australia and the US. eG Capital remains confident that the Company will achieve its stated goals."
As a result of the options exercise and underwriting, Progen is in a strong cash position with approximately $24.6 million in cash.
Progen CFO and Company Secretary Linton Burns commented. "We are encouraged and appreciative of the support shown by our option holders. The additional cash from the exercise of these options will help us to achieve important goals. In particular these cash resources will be applied towards progressing the PI-88 clinical program including the three Phase II trials currently ongoing, manufacturing scale-up and optimisation, licensing activities and advancing our innovative drug discovery efforts to the next stage of development."
The shortfall securities are due to be issued on 15 June 2005.
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