04/04/2016 - 14:39

TFS confirms $65m raising

04/04/2016 - 14:39

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Sandalwood producer TFS Corporation has confirmed a $65 million capital raising to buy-out plantations owned by managed investment schemes.

TFS confirms $65m raising
TFS Corporation managing director Frank Wilson.

Sandalwood producer TFS Corporation has confirmed a $65 million capital raising to buy-out plantations owned by managed investment schemes.

TFS has received firm demand from existing and new investors for the placement of 39 million shares at $1.55 each to raise $60 million, plus a share purchase plan at the same price to raise a further $5 million.

The price of the raising represents an 8 per cent discount to TFS’s closing price of $1.68 last week, before the company entered a trading halt.

The Perth-based company will use the proceeds of the raising to fund the acquisition of up to 221 hectares of plantations owned by managed investment schemes.

The total cost of the acquisition is expected to be no more than $53 million.

It will boost TFS’s direct-owned plantation portfolio to about 3,770ha, with institutional investors owning 3,670ha and MIS and high-net-worth investors owning a further 3,150ha.

“Consistent with our strategy of increasing TFS’s ownership of Indian sandalwood plantations, we will deploy the new capital by making offers to acquire the interests of growers in schemes due to be harvested in the next five years,” managing director Frank Wilson said.

He said the acquisition would boost TFS’s control of the supply of Indian sandalwood, ensuring the company meets its end-customer obligations.

Canaccord Genuity and Moelis Australia Advisory acted as joint lead managers to the placement.

TFS shares were 2.9 per cent lower to $1.63 each at the close of trade.

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