RMG raises $8.8 million to reduce debt

MEDIA RELEASE
25 June 2001

RMG raises $8.8 million to reduce debt and continue expansion

Receivables Management Group, RMG Limited, will raise $8.8 million with the exercise of its options, which is fully underwritten by Burdett Buckeridge Young Limited.

The 44 million former Frontier Petroleum options on issue, convert at 20cents per option resulting in the inflow of $8.8 million.

RMG Ltd, one of the largest receivable management companies in the southern hemisphere, was created in June 2000, out of Frontier Petroleum with the amalgamation of 16 Australian and New Zealand businesses. The company later acquired a further six businesses.

The capital raising will place the company’s balance sheet on a sound footing, said RMG’s Deputy Chairman and Chief Executive Officer James Boult.

“The funds will be used for preliminary debt reduction but also some retained against possible future business development projects which the Board may elect to undertake in the future,” he said.

“This will ensure the company is in a sound position prior to the commencement of the new trading year on 1st July 2001.”

Mr Boult was a former Executive Chairman, then Chairman of Baycorp Holdings. He headed up this company from 1989 to 1998 and achieved a remarkable turn around in the company’s fortunes in that period taking it to the best performing stock on the New Zealand Stock Exchange.

Iain Maine, Head of Corporate Finance at Burdett Buckeridge Young said the firm was delighted to be involved with RMG at such an exciting stage in its development.

“We believe RMG is poised for a period of significant profit growth. We are impressed with the way in which the company appears to have maintained its service standards and customer base since its creation. We believe Mr Jim Boult, the newly appointed Chief Executive of RMG, is an outstanding appointment and completes the management team that will drive the business forward strongly.

RMG last week announced that Agreement has been reached with the vendor shareholders in RMG Limited to voluntarily extend the escrow period for 78% of their shareholdings for a further 12 months to 30 June 2002. The vendor grouping includes, major shareholder Cullen Investments and founding shareholder and Director Paul Cooney, both of whom have escrowed 100% of their shareholding until June 30, 2002.

© Scoop Media