Mining services company Austin Engineering has launched a $31.6 million entitlement offer through broking firms Argonaut and Bell Potter, with the proceeds to be used to reduce debt.
As well as the fully underwritten entitlement offer, the company is raising a $20 million subordinated loan, which will be used to cut its bank debt.
The Brisbane-based company, which owns JEC (formerly John’s Engineering & Cranes) and Pilbara Hire in Western Australia, has also foreshadowed an improvement in earnings.
Its FY15 revenue is expected to be $205 million, with normalised EBITDA in the range of $14.5 to $15.5 million.
In FY16, it expects a lift to $235 million in revenue and $20 million in EBITDA.
Its core business is the design and manufacture of dump truck bodies, along with maintenance services for the mine sector in Australia and South America.
The entitlement offer will be pitched at 45 cents a share, an 18 per cent discount to the last traded price.
The $20.1 million institutional entitlement closes tomorrow, while the remaining $11.5 million is being raised in a retail entitlement offer that is expected to close on August 10.
The subordinated loan is being provided by LIM Advisors Special Situations Fund, at 9 per cent interest per annum for a 36-month term.
Trade in Austin shares is suspended at 55 cents a share.