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Steel & Tube Announces $80.9 Million Capital Raising
Steel & Tube Holdings Limited (NZX: STU) advises that it intends to raise approximately $80.9 million to recapitalise its balance sheet and allow it to execute its business transformation initiatives and achieve its longer term strategic objectives.
The capital will be raised by way of a $20.8 million Placement to selected institutions and other eligible persons at $1.15 per share followed by a fully underwritten pro rata 1 for 1.9 Rights Offer at NZ$1.05 per share and a shortfall bookbuild.
Chair of Steel & Tube, Susan Paterson, said: “We remain deeply committed to rebuilding Steel & Tube as a leading provider of steel products and solutions in New Zealand. We have worked hard to address legacy issues and early benefits from ‘Project Strive’ business transformation initiatives are now being seen.
“The capital raised will be used to repay debt, strengthening our balance sheet and giving us greater flexibility to execute our strategy and deliver better value for our shareholders. In addition, we expect the capital raising to strengthen Steel & Tube’s share register and help create liquidity which will benefit all shareholders.”
• Steel & Tube is
recapitalising its balance sheet to allow it to execute its
business transformation initiatives and achieve its longer
term strategic objectives.
• The company is
raising NZ$80.9 million via a $20.8 million Placement at
$1.15 per share followed by a fully underwritten pro rata 1
for 1.9 Rights Offer at NZ$1.05 per share.
• A
bookbuild will be undertaken at the end of the Offer period
for any shortfall; shareholders not taking up their rights
may receive value for their rights through this
process.
• FY18 results are expected to be
slightly ahead of guidance with an EBIT loss of
approximately ($36.2) million compared to ($38.0) million
and normalised EBIT[1] of $16.5 million, compared to $16.0
million announced in the 23 May 2018 guidance
statement.
• Given the capital raising, a final
FY18 dividend will not be paid. Dividends are expected to
be resumed in FY19 consistent with Steel & Tube’s stated
policy of paying 60-80% of normalised NPAT.
•
FY19 EBIT guidance is of at least $25.0 million, with
normalised EBIT of $35 million to $40 million expected to be
achieved in the next three years.
Read the full announcement attached.
ends
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