Drilling services company Ausdrill Ltd has completed a $95 million capital raising through a share placement and share purchase plan to fund expansion in Australia and Africa, including a move into contract mining in Australia.
Drilling services company Ausdrill Ltd has completed a $95 million capital raising through a share placement and share purchase plan to fund expansion in Australia and Africa, including a move into contract mining in Australia.
The full text of a company announcement is pasted below
Diversified international mining services group Ausdrill Limited is pleased to announce that it has raised $95 million (before costs) through a placement to institutional and professional investors and an underwritten share purchase plan (SPP).
Ausdrill will use the raising proceeds to:
- Fund further organic growth in Australia and Africa, particularly in the expansion of contract mining activities
- Augment working capital to fund the growth
- Maintain a conservatively-geared balance sheet with the capacity to exploit opportunities as they arise.
Argonaut acted as Manager to the placement and is the underwriter of the SPP.
Institutional Placement
Ausdrill has received firm commitments from institutional and professional investors via a bookbuild for the placement of 31 million fully paid ordinary shares at $2.50 per share.
The bookbuild will raise $77.5 million (before costs) and represents 23.4% of Ausdrill's current issued capital.
Shareholder approval is required to the extent that the placement shares exceed 15% of Ausdrill's issued capital.
The commitments in excess of 15% are subject to receipt of that approval. Ausdrill will also seek approval to ratify the issue of those placement shares that fall within the 15% capacity.
Ausdrill's Managing Director and largest shareholder, Mr Ron Sayers, proposes to participate in the placement such that his interests in Ausdrill will represent at least 12.5% of Ausdrill's expanded capital after the placement and SPP. The issue to Mr Sayers also requires shareholder approval.
Underwritten Share Purchase Plan
Ausdrill's Board has resolved to establish an SPP to allow eligible shareholders an opportunity to acquire shares at $2.40 (a 4% discount to the institutional placement price), to a value of up to $5,000, raising approximately $17.4 million before costs. The SPP price represents a 4.9% discount to Ausdrill's average closing share price of $2.52 over the five trading days prior to 31 October 2007 (the date on which Ausdrill's shares were placed into trading halt and voluntary suspension while the placement was conducted).
The record date for participation by shareholders in the SPP will be 16 November 2007 with the closing date anticipated to be 10 December 2007.
As the full value of the SPP is underwritten by Argonaut, shareholder approval is required to approve the issue of any shortfall shares to the underwriter.
Ausdrill will dispatch documents relating to the SPP and the required approvals to shareholders shortly.
Expansion of operations
Ausdrill has recently acquired a fleet of equipment which will form the basis of a new contract mining division in Australia which will leverage off of the skills learnt in the past 14 years in Africa.
In addition several organic growth opportunities have been identified elsewhere in the business and the capital raising will ideally position the company to achieve continued growth over the coming years
