Nomad Building Solutions has announced plans to raise $14.3 million via a share placement and an entitlement offer to strengthen the company's balance sheet.
Nomad Building Solutions has announced plans to raise $14.3 million via a share placement and an entitlement offer to strengthen the company's balance sheet.
The company also hopes to use the funds to facilitate its participation in a range of identified core business opportunities.
Nomad will issue 20.4 million new shares at an issue price of 12 cents per share to sophisticated and institutional investors of Entrust Private Wealth Management, together with some existing shareholders to raise $2.4 million.
It is also planning to raise $11.9 million via a pro rata non-renounceable entitlement issue of 3 new shares for every 4 shares held by shareholders at the issue price of 10 cents per new share.
The Entitlement Offer issue price represents a 33 per cent discount to the Company's current market price and a 34 per cent discount to the 20-day Volume Weighted Average Price.
"The net proceeds from the placement and the entitlement offer will generally be utilised for working capital purposes and to facilitate the Company's participation in a range of identified core business opportunities," said Nomad's managing director Michael Bourke.
"Part of the proceeds may be used for debt reduction should directors assess this is appropriate, but this is not currently required or planned."
See company statement below:
Nomad Building Solutions Limited (Nomad or the Company) (ASX Code: NOD) has entered into agreements to raise $14.3 million (before costs) by way of a placement and a non-renounceable entitlement offer. The funds raised will be principally applied toward strengthening the Company's balance sheet and to facilitate the Company's participation in a range of identified core business opportunities.
Institutional Placement
Nomad has agreed to issue approximately 20.4 million new shares at an issue price of $0.12 per new share to sophisticated and institutional investor clients of Entrust Private Wealth Management Pty Ltd (Entrust), together with some existing sophisticated shareholders of the Company, to raise $2.4 million (before costs) (Institutional Placement). The Institutional Placement will be made pursuant to the Company's available 15% capacity under the ASX Listing Rules and without shareholder approval.
Entitlement Offer
Nomad will also undertake a pro rata non-renounceable entitlement issue of 3 new shares for every 4 shares held by shareholders (being eligible shareholders of the Company on the proposed record date of 5.00pm (Perth time) on 23 November 2010 (Record Date)) at an issue price of $0.10 per new share to raise approximately $11.9 million (before costs) (Entitlement Offer). Participants in the Institutional Placement will be eligible to participate in the Entitlement Offer. The Entitlement Offer will be fully underwritten by Entrust. The underwriting agreement with Entrust is conditional upon the Company completing its preparation for, and issuing the prospectus, to the satisfaction of Entrust. It is also subject to termination events that are common for a transaction of this nature.
The Entitlement Offer issue price of $0.10 per share represents a 33% discount to the Company's current market price and a 34% discount to the 20-day Volume Weighted Average Price (VWAP).
The Entitlement Offer is expected to open on or around 24 November 2010, following the successful completion of the Institutional Placement. A prospectus and application form for the Entitlement Offer is expected to be dispatched on or around 24 November 2010 to shareholders who are registered shareholders of the Company on the Record Date. Shareholders should consider the prospectus in deciding whether to participate in the Entitlement Offer. Anyone who wants to participate in the Entitlement Offer will need to complete the application form that will accompany the prospectus.
Nomad's Managing Director, Mr Michael Bourke, said:
"The net proceeds from the placement and the entitlement offer will generally be utilised for working capital purposes and to facilitate the Company's participation in a range of identified core business opportunities. Part of the proceeds may be used for debt reduction should directors assess this is appropriate, but this is not currently required or planned."
He added:
"Whilst not directly related, the equity raisings follow the recently announced formal renewal of Nomad's bank facilities with Westpac. As a result of these accomplishments, the Company has significantly enhanced its financial structure which will enable Nomad to actively maintain its share of a growing market for its products and services, by supplying high-quality and innovative products to meet customer requirements in a safe, timely and profitable manner".
Nomad requests the immediate lifting of its trading halt as a result of the release of this announcement.
