TFS debt-free after capital raising

Sandalwood producer TFS Corporation says it will be debt free once it completes a $37.9 million share placement and rights issue.

TFS said it had already raised $27.4 million through an 80 cents per share placement to institutional investors, while it will also seek to raise an additional $10.5 million through a rights issue on the same terms.

The company said the funds would be used to pay out its $20 million bank debt and $10 million of shareholder's loans, which would leave the company debt-free.

TFS executive chairman Frank Wilson said there was excess demand for the placement from international and domestic investors.

"We are now in a very strong financial position," Mr Wilson said.

"The equity raising can be seen in the context of a wider funding package, currently under negotiation, which will assist in with our long-term requirements."

The placement and the rights issue were managed by Bell Potter Securities.