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ElderCare seeks $10M for expansion

By Phil Boeyen, ShareChat Business News Editor

Friday 28th September 2001

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Healthcare company ElderCare (NZSE: ELD) is planning to raise $10 million, partly from a rights issue, to help fund expansion and repay debt.

"Overall this programme could raise $10.48 million," says Chairman, Maurice Kidd.

"Combined with the ongoing asset sale programme this will ensure that ElderCare has ample capacity to pursue its acquisition objectives in the medical and healthcare arena."

One part of the capital raising is a $3.48 million renounceable rights issue comprising an offer of one new ordinary share at 16.5 cents per share for every 7.5 existing shares held.

Shareholders will be sent details on the offer next month.

ElderCare also plans to place 12.12 million ordinary shares at 16.5 cents per share with Alliance Capital Management, raising $2 million.

A further $5 million will be raised by way of a capital convertible note to Cullen Investments.

The note will mature in two years when the ElderCare board can choose whether to redeem 75% of the face value for cash or convert the amount into ordinary ElderCare shares at the lesser of 22 cents per share or a 10% discount to the then market price.

Interest payable on the unsecured note is 11.75% to be capitalised and paid out at maturity.

The company says the note placement and the Alliance placement at 16.5 cents are at a premium to the current market, and indicates strong endorsement of ElderCare's strategy to move into the broader healthcare and medical markets.

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