The cash rush continues.
Friday saw the rural; chemicals and farm products group; Nufarm hunt for $300 million and yesterday Billabong stuck its hand up for up to $290 million, GrainCorp, $60 million and Automotive Holdings, the country’s largest car dealer, an unknown amount.
Automotive Holdings Group went into a trading halt while it seeks to raise fresh capital to cut debt and pursue growth opportunities.
Managing director Bronte Howson said the company’s earnings for the final quarter were expected to be about the same as for the second and third quarters of the 2009 financial year.
Net profit was $11.1 million for the quarter ending March 31, 2009.
The capital raising would be used to pay down debt, he said.
Figures given in a recent presentation showed the company had debt of $353 million, which included finance company floor plan loans of $346 million. That left net current debt of $7 million. But it also had $80 million of non current debt at December 31, up from $78 million at the end of June last year.
"Following this raising, AGH’s net debt will be considerably reduced, providing significant capacity under existing facilities to pursue our growth strategies," Mr Howson said in a statement to the ASX.
The trading halt was called before the market opened yesterday.
"AHG plans to offer existing shareholders the opportunity to participate in a Share Purchase Plan, details of which will be announced shortly."
The trading halt should be lifted Wednesday, the company told the ASX.
The shares closed at $1.30 on Friday.
Nufarm shares slid yesterday after bouncing in the wake of the successful $300 million issue late last week.
The shares fell 4.2% in yesterday’s down market which saw a fall of around 1%. The closed down 53 cents at $11.96.
Nufarm’s institutional placement was priced at $11.25 a share, representing a 9.9% discount to Nufarm’s closing price on May 14 2009.
The company said there was strong demand from domestic and international institutions and the placement was significantly oversubscribed.
Last week GrainCorp guided the market to a sharply improved interim profit, which it confirmed yesterday, while revealing plans to join the cash splash to the tune of $60 million.
Graincorp said net profit for the half year to March 31 was $32.3 million, up from a loss of $6.5 million in the prior corresponding period.
The company again confirmed its full year guidance of net profit of $37 million-$42 million, on the back of "improved seasonal conditions".
But the company isn’t paying an interim dividend.
The higher profit was struck on 6% rise in revenue to $858.031 million for the half year, with earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubling from $32 million to $82 million.
GrainCorp Managing Director Mark Irwin said the result was "very pleasing” and it’s a significant turnaround from the past two drought-affected years.
"Improved seasonal conditions in Queensland and Northern NSW through 2008, and into early 2009, boosted our grain receivals and allowed the grain export sector to bounce back," Mr Irwin said.
"Our profit result is also good news for growers. Our tonnage and export numbers are up which means growers are harvesting and marketing grain.
"The last winter and summer crop harvests were a welcome return to production and profitability for many growers.
Mr Irwin said the company was "encouraged by the current prospects for a good harvest later this year.
"Growers across Southern NSW and Victoria have been disadvantaged by drought, and a return to favourable conditions in these regions would boost their prospects as well as ours,:" he said in the statement.
"Conditions in Northern NSW and Queensland are looking favourable."
Graincorp said the capital raising was aimed at positioning the grain-handler for growth.
"We are undertaking the capital raising to strengthen the balance sheet of the company as we recover from two consecutive drought affected years," he said.
"The equity raising will increase our financial flexibility and will reduce the gearing of the company.
"GrainCorp will be better positioned to take advantage of growth opportunities in existing businesses, via target projects and capital investment, and to take advantage of income diversification opportunities as they arise." (Source)
Graincorp will seek to place $60 million in shares at $6.25 a share, which was a 14.3% discount to the volume weighted average price to last Friday, May 15, 2009.
Nufarm got its money with a smaller discount, and much smaller than Billabong’s 30%.
