Struggling marine services company MMA Offshore will raise nearly $100 million to repay debts and repair its balance sheet, despite opposition from major shareholder Halom Investments.
The $97 million raising includes a one-for-one, $74.6 million non-renounceable rights issue at 20 cents per share, a 14.9 per cent discount, and a $22.4 million institutional placement at the same price.
MMA said its existing lenders had agreed to amend the company's existing debt facilities by extending the term for two years through until 2021 and reducing the interest rate.
This is subject to the company raising at least $65 million in new equity.
Overall, the company expects its net debt position to drop from $295 million to $203 million following the placement.
MMA chairman Andrew Edwards said the recapitalisation measures were necessary.
“Following the outcome of a strategic review, the board decided that a combination of an equity raising and amendments to the company’s existing debt facilities was the most appropriate course of action to improve the company’s balance sheet and provide a platform to take advantage of any sustained improvement in industry conditions,” he said.
The raising comes two weeks ahead of the company’s annual meeting, at which Halom, whichhas an 18 per cent share in the company, will move a motion to remove managing director Jeff Weber.
The investment group has raised a host of concerns with MMA’s capital structure and leadership.
The company announced the retirement of chairman Tony Howarth simultaneously to Halom’s call for his removal in September.
Halom has also proposed the election of two of its own members to the company’s board, Jeffrey Mews and Haridass Ajaib.