CBL raises $60 million in 'heavily oversubscribed' placement

Friday 30th September 2016

CBL Corp completed the first tranche of a planned capital raising in a "heavily oversubscribed" placement, selling $60 million of new shares at an 8.2 percent discount.

The Auckland-based credit surety and financial risk insurer sold about 17.4 million shares at $3.45 apiece to institutional investors in New Zealand, Australia and further afield, it said in a statement. The offer had been fully underwritten by UBS New Zealand, which was also the sole lead manager, but chief financial officer Carden Mulholland said the offer was "heavily oversubscribed". The shares fell 1.9 percent to $3.69 when trading resumed today, still above the offer price.

"The placement provides CBL with greater financial flexibility to pursue exciting growth opportunities that we have identified," managing director Peter Harris said. "We are very pleased with the level of support from our existing shareholders and I am pleased to welcome a number of new investors onto the CBL share register."

The funds raised will reduce CBL’s pro forma debt to $102 million from $162 million, which the insurer says will give it enough room to pursue new opportunities. Those include accelerating existing business lines into new markets, such as selling surety bonds into Spain and Italy, and chasing new acquisitions, with the company in talks to buy a licensed shell insurance company in the US for US$6.3 million.

CBL plans to raise up to a further $3 million through a share purchase plan to eligible investors on the register on Sept.28. The offer period runs between Oct. 5 and Oct. 25.

BusinessDesk.co.nz

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