Trading in Village Roadshow shares resumed yesterday and on the face of it the 14.4% fall to $1.865 after the suspension to allow the first stage of a $51 million fund raising to happen was good news.
The new shares were issued at $1.65 each (via a five for 26 issue) a 21.1% discount to the latest sale before the issue of $2.18.
The company told the ASX yesterday that it had completed the institutional component of offer which raised gross proceeds of approximately $35.7 million, including $20.9 million from Village shareholder.
"The Institutional Entitlement Offer attracted strong support from VRL’s institutional shareholders, raising $14.7 million ($35.7 million including VRC shareholders), with eligible institutions taking up approximately 96% of entitlements.
Village Co-CEO and Co-Chairman, Graham Burke, said “We are pleased with the strong support shown by VRL’s shareholders and other institutional investors for the equity raising. We now look forward to completing the Retail Entitlement Offer for the benefit of VRL’s shareholders.”
Now for an even bigger test of faith – the retail offer. Village wants to raise approximately $15.7 million.
That will be a big ask as the company’s performance in the past three years has been one of sliding revenue, growing losses and problems.
Village intends using the funds raised from the issue and around $37 million net from the sale of Wet’n’Wild Water park in Sydney’s west to reduce debt.
Village’s problem is that it had a revolving credit of $425 million that needs reducing, with $375 million due in December 2019 and another $50 million a year later.
