Allied seeks fresh funds to cut debt
Allied Farmers is seeking to raise $19.3 million through a partially underwritten share placement and rights issue to reduce its debt and to buy time to sell assets.
The capital raising, which has been partially underwritten by brokers McDouall Stuart, will comprise an institutional placement raising $2.25 million at 2.5c a new share and a rights issue to current Allied shareholders entitling them to one new share at 2.5c for every three shares held.
The placement, combined with the underwritten component of the capital raising, would mean that at least $9 million would be raised, Allied said.
Allied opted for the rights issue and placement because it gave the company time to realise value from its asset portfolio and continue its focus on reducing debt.
The company, which took over the assets of failed finance company Hanover Finance late last year, expects the finance sector and asset values to recover in time.
The recently completed sale of the Five Mile development, in Queenstown, at close to valuation demonstrated what could be achieved with former Hanover assets, Allied said.
Allied shares last traded at 4.2c, down 1.2c from Monday’s closing level.