Agricultural products and pesticides group, Nufarm has received a vote of confidence from big shareholders who paid a premium to the company’s rights issue share price in filling the institutional component of its fully underwritten 3 new shares for every 19 held $303 million fundraising offer at $5.85 a share.
Nufarm said the first round issue raised 90% of the amount sought and the bookbuild to clear the remaining 10% of the institutional issue went for $6.35 a share, a 50 cents a share premium to the offer price.
(Japanese group, Sumitomo, the major shareholder, did not participate in the issue).
Nufarm announced the offer last Wednesday and the raising and bookbuild took place on Thursday and Friday.
The money raised from the issue will help ensure Nufarm maintain its financial position to enable it to cut working capital and meet any extra costs of the worsening east Coast drought in Australia which has seen debt surge to more than 41.3 billion at the end of July.
The Institutional offer raised around $238 million at $5.85 a share, while the bookbuild saw the remaining 10% of the institutional offer go for $6.35 a share.
Nufarm said eligible institutional shareholders did not take up their entitlements and certain ineligible institutional shareholders will receive 50 cents for each entitlement sold through the bookbuild.
Nufarm’s Managing Director and CEO, Greg Hunt said in a statement “we are very pleased our shareholders have strongly supported the equity raising, which helps ensure Nufarm remains in a strong position to manage short-term balance sheet risk and supports the continuation of the Company’s growth strategy in light of recent market uncertainty.”
“There was strong demand for shortfall shares in the Institutional Shortfall Bookbuild from both existing shareholders and new investors, and we are pleased that institutional shareholders who did not participate will receive a premium of A$0.50 for their renounced entitlements.”
The offer to retail shareholders opens on Thursday and will look to raise $65 million. It closes on October 17.
Nufarm shares fell 9.7% yesterday (which was not unexpected) to end at $6.05, giving those who took shares in the original offer a nice profit.
