IT services provider ASG Group has completed a $10 million capital raising and will use the funds to pay for the construction of a new data centre in Perth.
IT services provider ASG Group has completed a $10 million capital raising and will use the funds to pay for the construction of a new data centre in Perth.
ASG issued 8.3 million new shares at $1.20 per share, a discount of 5.9 per cent to the last closing price of ASG shares.
The placement was fully underwritten by UBS AG, Australia Branch.
Simultaneous with the placement, an additional 3.5 million secondary shares were sold to investors on behalf of four senior ASG executives, including chief executive officer Geoff Lewis (pictured).
The exercise of options will result in additional cash proceeds of $2.3 million being received by ASG.
"We see the construction of the Perth Data Centre as providing an additional competitive advantage to ASG through the enhanced client experience it allows us to deliver," said Mr Lewis.
"While comfortable with existing gearing levels, the raising will ensure that we retain appropriate capacity to continue to fund both the organic and acquisition growth opportunities we see for the business, with minimal dilution to non participating shareholders," he said.
See company statement below:
IT services provider ASG Group (ASX: ASZ) is pleased to announce that prior to market open on 26 November 2010, the company completed a placement of new shares to raise $10 million. The raising was completed at price of $1.20 per share, a discount of 5.9% to the last closing price of ASG shares, and will result in the issue of 8.3 million new shares to participating investors.
Proceeds from the placement will be used to fund the construction of the new ASG Data Centre in Perth and to ensure that ASG's balance sheet retains sufficient strength and flexibility to support future growth.
Commenting on the transaction, Chief Executive Officer of ASG, Mr Geoff Lewis said that "As previously disclosed, we see the construction of the Perth Data Centre as providing an additional competitive advantage to ASG through the enhanced client experience it allows us to deliver. Our clients have recognised this with the initial expected capacity of the Data Centre already 70% contracted. While comfortable with existing gearing levels, the raising will ensure that we retain appropriate capacity to continue to fund both the organic and acquisition growth opportunities we see for the business, with minimal dilution to non participating shareholders."
Simultaneous with the placement, an additional 3.5 million secondary shares were sold to investors on behalf of four senior ASG executives, including Mr Geoff Lewis. The majority of funds will be used to fund the take-up of an equivalent number of options and tax liabilities associated with the sales.
The exercise of options will result in additional cash proceeds of $2.3 million being received by ASG.
Settlement of the above transactions is expected to occur on 1 December 2010, with new shares to commence trading on 2 December 2010. New shares will rank pari passu with existing ordinary shares.
The placement was fully underwritten by UBS AG, Australia Branch.
