ENGINEER RCR Tomlinson’s $10 million capital raising via a rights issue and share placement has met with disapproval from major shareholder Singaporean-based MTQ, which has decided to vote against the deal.
Engineering, subsea equipment and engine component group MTQ, which holds 28 per cent of RCR, plans to write to the WA-based company’s shareholders this week listing its objections to the fund raising led by Perth stockbroker Hartleys.
An MTQ spokesman said the Singaporean group was happy with the performance and direction of RCR but opposed company’s capital management strategy, particularly the $7 million placement.
The spokesman said that debt should be used to supplement a rights issue, allowing share-holders to avoid dilution from the placement at a price below RCR’s current trading range.
MTQ also dismissed the argument of a re-rating of the stock due to new institutional involvement as “speculative”.
But RCR managing director John Linden said that MTQ was only looking after itself through its opposition to the placement.
Mr Linden was confident that the vote would be favourable at next week’s EGM. He said RCR’s recent share price surge could be partly attributed to the placement, which had resulted in a re-rating of the stock and would bring in nine new institutional investors.