- The COVID-19 pandemic has posed a significant threat to the liquidity position of several organisations, compelling them to raise funds to meet working capital needs and bolster their financial position.
- The prolonged crisis, coupled with the uncertainty surrounding the present scenario, has prompted companies to address their liquidity challenges.
- IT Company Iress has completed the placement of AUD 150 million while Panoramic has finalised the underwritten institutional placement and the institutional component to raise ~AUD 51.94 million.
- Arena REIT completed an institutional placement whose size was increased by AUD 10 million to AUD 60 million.
Businesses across diverse sectors have been impacted with stalling of operations, lower demand of products and services, and uncertainty surrounding the extent of the Global Virus Crisis, or GVC. To stay afloat in these testing times, various companies have sought investor support to raise additional funds.
Amid the long wait for a medical breakthrough, the entire world is living in an uncertain virus-driven environment. That said, after fluctuating for two days in a row, on Wednesday, 3 June 2020, benchmark index S&P/ASX200 reached a three-month high and closed at 5941.6, up by 1.83 per cent. The index moved further north and was 0.48 per cent higher on 4 June (at 1:19 PM AEST)
Let's discuss a few stocks that have recently raised capital in this uncertain market situation.
Iress successfully completes AUD 150 million placement
Iress Limited (ASX:IRE) is a global IT company offering software solutions to the financial services industry. It provides software for investment management, mortgages, trading & market data, financial advice, superannuation, life & pensions, and data intelligence.
Iress has announced the successful completion of AUD 150 million fully underwritten placement of approximately 14.4 million new fully paid ordinary shares to institutional and sophisticated investors at AUD 10.42 per Placement Share.
While allocating the placement shares, Iress gave preference to the existing shareholders, and the new investors that it considers are most aligned with their business. Eligible shareholders were allocated their full bid.
Iress chief executive, Andrew Walsh said it would further strengthen the Company's balance sheet and will help to respond better to the opportunities in the current environment. It will also help in funding the proposed takeover of OneVue. The Company also appreciated the support it received from shareholders for the equity raising.
On Friday, 5 June 2020, the placement share will be issued and begin trading on the ASX on a routine basis. The new shares issued is approximately 8.2 per cent of the Company's existing shares on issue.
Iress will also offer a non-underwritten Share Purchase Plan to the eligible shareholders to subscribe for up to AUD 30,000 each in additional shares. It will be free of any transaction and brokerage fees.
IRE is aiming to get approximately AUD 20 million through the SPP. The conditions that required to be an eligible shareholder are - one should be a registered Iress shareholder by 7:00 PM (Sydney time) on Friday, 29 May 2020, have a registered address in NZ or Australia, do not hold the Company's shares on behalf of someone living outside NZ or Australia and should not be staying in the US or acting for the account or benefit of any person in the US.
The SPP issue price will be lesser of the placement issue price of AUD 10.42.
IRE will decide whether to raise more than AUD 20 million or reduce the applications, depending on the demand under the SPP. While taking the decision, the Company will be fair with shareholders. SPP's full details will be announced on or around Tuesday, 9 June 2020.
On 4 June 2020, IRE stock was trading at AUD 11.930 (at 2:29 PM AEST), an increase of 3.829 per cent compared to the previous day’s close. The Company has a market cap of AUD 2.03 billion.
Panoramic completes placement and institutional entitlement offer to raise AUD 51,939,597
Panoramic Resources Limited (ASX:PAN) is an Australia-based mining company founded in 2001.
On 2 June 2020, the Company announced the successful completion of the underwritten institutional placement and the institutional component to get AUD 51,939,597.
410,182,572 fully paid ordinary shares were issued at an offer price of AUD 0.07 to raise AUD 28,712,780. Also, 331,811,671 New Shares were issued under the Institutional Entitlement Offer to raise an additional AUD 23,226,817.
The New Shares began trading on 2 June. Panoramic also highlighted that Western Areas Limited (ASX:WSA) holds a 19.9 per cent stake in its fully paid ordinary shares.
On 4 June 2020, PAN stock was trading at AUD 0.075 (at 2:29 PM AEST), in line with the previous day’s close. The Company has a market cap of AUD 112.88 million.
Arena REIT successfully completes the institutional placement
Arena REIT(ASX:ARF) is a property company that builds, maintains, and owns social infrastructure properties across Australia. It has announced the successful completion of the fully-underwritten institutional placement. The size of the placement was increased to AUD 60 million from AUD 50 million due to strong support from potential investors and the existing security holders.
The institutional placement's cost is AUD 2.28 per Security, 5.0 per cent discount to the closing price of AUD 2.40 per security on 1 June 2020 and a 7.3 per cent discount to the 5-day VWAP to 1 June 2020 of AUD 2.4594 per security.
A total of around 26.3 million new Securities will be issued to the investors.
The allocation and trading of placement Securities will begin on Tuesday, 9 June 2020. As per the announcement made on 2 June, ARF aims to offer non-underwritten SPP to the eligible security holders in NZ and Australia to raise up to AUD 10 million.
Securityholders who were registered with the Company by 7:00 PM (AEST) on 1 June 2020 will be eligible to get the invitation for a subscription of up to a maximum of AUD 30,000 additional new securities per security holder, free of transactional and brokerage fees.
On 4 June 2020, ARF stock was trading at AUD 2.470 (at 2:29 PM AEST), a decline of 1.2 per cent compared to the previous day’s close. The Company has a market cap of AUD 752.41 million.
Despite all the doom and gloom in the market, these companies are doing their best to ensure that they have enough funds to continue their operations and seize any business opportunity that comes their way during the unprecedented business environment.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.