Vitamins and supplements maker and exporter, Blackmores has joined the fundraising club with a $117 million offer to shareholders on Wednesday.
The raising includes a fully underwritten $92 million share sale to institutions and a non-underwritten share purchase plan of up to $25 million to retail holders.
News of the raising was made in a statement to the ASX on Wednesday before the Australian sharemarket opened. The shares were suspended to allow the major placement to be carried out.
A surprise was that founder and still key investor Marcus Blackmore won’t be participating in the issue, explaining he was “unfortunately […] unable to participate in the equity raising at this time”.
Mr. Blackmore said he supported the decision to sell new shares and praised the leadership of newish CEO, Alastair Symington’s leadership.
“Blackmores has been an integral part of my family since 1932 and needless to say I am absolutely committed to being a long term shareholder,” he declared.
“The equity raise will strengthen Blackmores’ balance sheet and liquidity position and provide the flexibility to pursue our key strategic priorities,” CEO Alastair Symington said.
“It will enable us to accelerate our growth initiatives in Asia and invest in our efficiency program which will help us to achieve our objective of returning Blackmores to sustainable, profitable growth.”
Blackmores said it remained on track to record a June 30 full-year underlying net profit of between $17 million and $21 million.
“This is in-line with guidance provided with the first half 2020 results (on 25 February 2020) and reflects the higher costs associated with manufacturing and other factors including COVID-19 as previously announced,” the company said in Wednesday’s statement.
The new shares to fund managers will be sold at $72.50 a new share, an 8.1% discount to the company’s last closing price on Tuesday of $78.85.
Blackmores joins a long list of companies to ask shareholders for funds during the coronavirus crisis including Cochlear, Reece, Kathmandu, the National Australia Bank, Ramsay Healthcare, Southern Cross Austero, and Incitec Pivot.
