Goodman Fielder seeks $A259m new equity

Goodman Fielder has announced plans to raise $A259 million through a fully underwritten 5-for-12 pro-rata entitlement offer at A45c, at 23.7% below its last traded price.

The breads and spreads maker said the proceeds will be used to ensure greater balance sheet flexibility and provide for additional headroom under Goodman Fielder’s financing facilities.

The entitlement offer will be conducted via an accelerated renounceable rights offer with retail rights trading.

Chief executive Chris Delaney said good progress was being made with the company’s strategic review with the next update due on November 17.

Based on this progress, the entitlement offer is a “prudent and necessary step” to strengthen the company’s balance sheet in expectation of future restructuring and operational initiatives.

“This raising will strengthen our balance sheet so that we can drive potential restructuring and operational initiatives which may result from the strategic review that I announced in August 2011 as well as pursing other value accretive initiatives as they emerge. Having the flexibility to pursue value accretive initiatives will be of benefit to all shareholders over the medium and longer term,” Mr Delaney said.

The offer involves an accelerated institutional offer and a retail offer that includes the ability to trade on ASX and NZX.

The offer price of A45c is a 23.7% discount to the September 26 closing price. The new shares will not be eligible for Goodman’s FY11 final dividend.

Goodman Fielder's strategic review is a medium to long term project aimed at renewing the company’s group structure, examining its portfolio prioritisation and optimising operations and supply chains.

The company said while the review is still in its early stages, the board has approved plans to transform the New Zealand business from three independent retail business units into a "single market facing business". 

In an investor presentation released to NZX, it said "Good progress in the last three weeks on plan to transform New Zealand from three independent retail business units into a single market facing organisation."

This will bring annual cost savings of a minimum of $A15 million, which will be fully realised within the next two years, the company said, and further upside is expected from improved revenue generation.

Goodman's said this project remains subject to employee consultation under to New Zealand labour law. 


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Why can't GF fund the restructure through cashflow...becasue they are screwed.

The A$259m is to cover Graeme Hart's lack of capex when he had it.

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