OTOC secures $10m

Perth-based contractor OTOC has secured $10 million in funding to pursue its national expansion, through a 20-cent placement of 50 million shares.

The mining services provider said the placement was strongly supported by new and existing institutional and sophisticated investors, resulting in it being “significantly overbid”.

Proceeds from the placement, lead managed by GMP Securities and Veritas Securities, will be used to fund future acquisitions in line with OTOC’s national surveying strategy and general corporate purposes.

Last month, OTOC announced it had bought Victorian surveying firm Bosco Jonson for $17 million, as part of its strategy to create a national surveying business.

The purchase announcement resulted in a 26.6 per cent increase in the share price, to 19 cents, on August 28.

“The acquisition of Bosco Jonson, which is expected to be completed in late September 2014, provided OTOC with an ideal first step into the east coast market and we are encouraged by the opportunities to expand our geographic coverage,” OTOC chief executive officer Simon Thomas said.

“This placement will assist us to pursue our expansion plans and the potential to acquire surveying firms that offer a specialised product or niche market exposure.”

The placement will take place over two tranches, with the first 40 million shares expected to settle on September 18.

The remaining 10 million tranche two shares will be issued subject to shareholder approval at OTOC’s annual general meeting, expected to be held in October.

OTOC’s share price closed at 23 cents per share today.