Adcorp Australia Limited (ASX: AAU) is going forward with the business restructuring and capital raising program as per the official announcement. The company is aiming to raise $3 Mn through fully underwritten 3 for 2 renounceable pro rate entitlement offer. The company would issue 273,044,709 new fully paid ordinary Adcorp shares at a price of $0.011 per share. The restructuring is aimed towards rebranding the business and create a strategic marketing solution entity.
Further, the proceeds from the Capital raising would ensure company’s working capital requirements, restructure process. According to Adcorp, the funds would be used towards transforming the entity into a profitable marketing solution. Entitlement is full underwritten according to Adcorp, and the underwriting entity is associated with Ian Rodwell who holds major stake and is currently the chairman of the company. Rodwell linked entities currently hold 74.34% stake in the company. Adcorp is confident that restructuring of the business is in the favor of shareholders from the long-term perspective. It would underline the sustainable growth for the agency as well as its video divisions.
The company is basically aiming towards a more streamlined and highly profitable business. Post restructuring, rebranded Adcorp along with its other profitable operating divisions of New Zealand, Showrunner and Quadrant in addition to 15% stake in Shootsta, would earn affirmative EBITDA and cash flow for the company. Major restructuring is expected to be completed by the second quarter of FY19. During the course, Alex Parsons would step down as Chief executive officer and assume a non-executive, advisory role. David Morrison, currently the executive director of the company would be the next CEO.
Current CEO, Alex Parsons and his successor David Morrison have agreed to forfeit the yet to be issued 48,000,000 share units (in aggregate), earlier approved by the shareholders during the Company’s extraordinary general meeting held on 7 June 2018.
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