Thursday 6th September 2018
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Steel & Tube Holdings sold the leftover shares from a rights issue at a premium to what was a discounted offer, raising another $17.8 million to repay debt.
The Lower Hutt-based company sold the stock at $1.23 apiece, matching the last trading price, and a premium to the rights offer's deeply discounted $1.05 a share. The steel products maker has now raised $80.9 million, which it will use to repay bank debt after breaching a lending covenant earlier this year when impairment charges and restructuring costs pushed it into the red.
"We are confident that the capital raise, combined with the new mix of institutional investors, will result in improvements in value for long-term shareholders who have supported the company," chair Susan Paterson said in a statement. "The funds raised significantly reduce our debt and ensure that the company has the financial flexibility to pursue its business transformation initiatives."
Steel & Tube is overhauling its business under the leadership of Mark Malpass after a review this year uncovered a number of legacy problems. It now thinks it's on a more sustainable path and has said recent sales trends have given it confidence it can resume dividend payments in the 2019 financial year.
Because the shortfall bookbuild sale price was a premium to the rights offer, shareholders who didn't take up their entitlements will be paid 18 cents for each share they didn't take up. The payment of about $3.4 million will be made by Sept. 11.
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