21/03/2017 - 14:27

Emeco taps market for $20m to fund merger

21/03/2017 - 14:27

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Heavy equipment supplier Emeco Holdings has launched a fully underwritten $20 million capital raising to fund its three-way merger with east coast companies Orionstone and Andy’s Earthmovers.

Emeco taps market for $20m to fund merger

Heavy equipment supplier Emeco Holdings has launched a fully underwritten $20 million capital raising to fund its three-way merger with east coast companies Orionstone and Andy’s Earthmovers.

Emeco will raise the funds by way of a 0.31-for-1 entitlement offer, priced at 10.9 cents a share.

The price represents a 45 per cent premium to Perth-based Emeco’s last closing price, with the raising fully underwritten by the company’s shareholders including US-based investment group Black Diamond Capital Management.

“The entitlement offer is a key component of the recapitalisation of Emeco and merger with Orionstone and Andy’s,” Emeco managing director Ian Testrow said.

“The funds raised under the entitlement offer will be used to fund the transaction and will provide greater financial flexibility during the integration period.

“The entitlement offer also assists in minimising existing shareholders’ dilution from the transaction and enables shareholders to further participate in the upside of the combined group.

“It is very pleasing to have our two biggest shareholders and largest bondholder demonstrate their continued support for and commitment to Emeco’s growth strategy by underwriting the entitlement offer.”

The merger was approved by Emeco’s creditors and shareholders last week, and is expected to be completed by the end of the month.

Emeco shares closed 10.6 per cent higher to 8.3 cents each.

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