Seven Group launches mega raising

Seven Group Holdings has entered a trading halt ahead of a $550 million equity raising, aimed at helping the company reduce its debt and pursue further growth opportunities..

It comes days after Seven invested a further $1.1 billion in building materials company Boral, taking its stake to just under 23 per cent.

Seven's other assets include WesTrac, Coates Hire, and Beach Energy, as well as a majority stake in Seven West Media.

The equity raising comprises a fully underwritten, $500 million placement and $50 million share purchase plan, with both offers priced at $22.50 per share. It represents a 4 per cent discount to Seven Group’s last closing price of $23.43.

The company plans to reduce its overall debt from $2.6 billion to $2.1 billion and improve its liquidity position by increasing Seven Group's free float from 38.8 per cent to 42.5 per cent.

Managing director Ryan Stokes said the raising was an important step in Seven’s efforts to strengthen its balance sheet and provide flexibility for future growth.

“As our track record demonstrates, we maintain a disciplined approach to investment and capital allocation for the long-term benefit of our shareholders,” he said.

“Today’s raising follows positive investor feedback and reflects a desire to see a continued increase in free float.”

In February, Seven Group had reported a 4 per cent rise in first-half revenue to $2.4 billion and a 14 per cent jump in underlying operating cash flow to $367 million – with Mr Stokes attributing the growth to a strong performance across Seven’s key operating businesses.

The group will issue about 22.2 million shares to institutional and sophisticated investors under the placement, which will be followed by a non-underwritten SPP open to eligible retail shareholders.