TFS prices offer to raise $150m

Sandalwood plantation operator TFS Corporation has priced an offer of senior secured notes and options, to raise $150 million to acquire land and sandalwood and for general corporate purposes.

TFS Corporation said that investors would receive 370 options for each $US1,000 in notes purchased, resulting in a total of 55.5 million options to be issued.

Each option will be exercisable for one ordinary share at a price per share of $1.28.

The options expire on July 15, 2018.

A meeting of TFS shareholders is expected to be held in late July or early August to consider approval for the issue of the options.

The capital raising announcement comes a day after TFS said a Middle Eastern wealth fund had exercised an option to plant an additional 322 hectares of Indian sandalwood plantations in Western Australia.

The fund settled its initial investment of 376 hectares in January.

TFS said Foreign Investment Review Board approval had been obtained for the additional investment, and initial proceeds of $21 million were expected to be received within two business days.

The fund will also pay a further $12 million in anual management and investment service fees over the life of the investment, and will allocate an additional $10 million for the purchase of MIS grower woodlots in the secondary market.

Shares in TFS were one cent lower at 92 cents at 1056 AEST.