Ascot-based olive oil maker Olea Australis Ltd will raise around $2.7 million for working capital through a rights issue to shareholders, following the buy-back of two managed investment schemes.
Ascot-based olive oil maker Olea Australis Ltd will raise around $2.7 million for working capital through a rights issue to shareholders, following the buy-back of two managed investment schemes.
The issue, of 147.4 million new shares at 1.8c each, will be made on the basis of one new share for every three held. The deal is underwritten by Olea's largest shareholder, Siva Ltd.
The full text of a company announcement is pasted below
Olea Australis Limited is pleased to announce that it will be offering its shareholders a fully underwritten Pro-rata Renounceable Rights Issue of up to 147,393,959 new shares at 1.8 cents each, on the basis of 1 New Share for every 3 Shares held at the record date to raise up to $2,653,091.
The Company's largest shareholder, Siva Limited will support the issue through the take up of their entitlements of $351,990 and will be the priority underwriter for the issue with precedence in any shortfall that may eventuate up to a limit of $923,010.
The Directors of Olea Australis Limited and their associates will support the issue through the take up of their entitlements of $307,721 and the non-executive directors will provide additional support by underwriting part of any shortfall that may eventuate after Siva Limited's priority allocation up to a limit of $577,407. The balance of the capital raising will be underwritten by other existing
shareholders to a maximum limit of $492,963 including the take up of their entitlements.
The Company is currently preparing an Olea Australis Limited Prospectus for this issue. The Record Date for the Rights Issue is still to be determined.
The consolidated entity has recently completed the effective buy back of the leasehold and other associated interests from the Growers in the two managed investment schemes Olea Australis Project (ARSN 091 255 364) and Olea Australis Stage II (ARSN 096 301 816). The effective buy back is expected to provide the following benefits:
- Wholly owned fully integrated olive oil business, commencing with 385 hectares of plantation production and finishing with high value branded olive oil sales;
- Greater flexibility in its plantation management strategies without the restrictions imposed bythe managed investment schemes;
- A simplified business structure more easily understood by Capital Markets;
- Provide the consolidated entity with more options to fund its future growth;
- Increase the net assets of the consolidated entity through the effective acquisition of a further 195 hectares of olive trees; and
- The consolidated entity will no longer be required to purchase olives from the Managed Investment Scheme Growers at market price but rather produce olive oil at its own plantation and processing cost.
The effective buy back of approximately 195 hectares has resulted in the consolidated entity requiring additional working capital. The proceeds from this Rights Issue will be used to meet this requirement by stabilising the business through the improvement in working capital as well as the repayment of a transitory overdraft. Any additional working capital remaining after the repayment of the transitory overdraft will be used to meet the increasing levels of olive oil production that have more than doubled from last year as well as allow for the identification and evaluation of other olive oil and corporate opportunities that may arise.
With the financial support provided by its key shareholders and bankers, along with the strong base in the Dandaragan operations, the consolidated entity continues to focus on being a sustainable business that is a long-term participant in the continued growth of extra virgin olive oil in Australia and throughout the world.
