Agreement Australian Whisky Holdings (ASX: AWY) is happy to inform that the application which the company has received from the sophisticated and professional investors to raise $11,946,049 has been accepted which also include $5 million from Ace Cosmo Developments Limited (Ace Cosmo) which is a Hong Kong-based investor. In order to raise the funds through placement, the company will issue 291,367,057 fully paid ordinary shares. Based on the last closing price on 1 November 2018, the shares will be issued at a discount of 6.8% which is equivalent to $0.041 per share (4.1 cents per share).
The Company has also entered into a distribution agreement with Ace Cosmo. As per the distribution agreement, the company will the do marketing and distribution of the Company’s brand. It also includes Lark Distillery, Overeem Whisky, Nant Distilling Company and Forty Spotted Gin products in Hong Kong. This distribution is agreed for a period of initial 1 year, with a further option of 2 years.
Ace Cosmo Developments is an investment company which into the business to invests in food and beverage companies in order to get benefitted from the consumption growth basically in premium food and beverage products in regions of Asia and China. The company has also made investments in premium restaurant in Macau and Sydney, distribution of food and beverage in Hong Kong and Asia and Sake brewery in Japan. The goal of Ace Cosmo Developments is to add value to investments and also by means of partnering, expand their distribution in Asia. The distribution for Hong Kong as mentioned above will allow the Australian Whisky Holdings products on and off premise outlets in Hong Kong.
As per the agreement between the company and Ace Cosmo, Ace Cosmo will hold 121,951,219 shares in the Company. Additionally, the Ace Cosmo also holds the right to nominate a person as an additional non-executive director to the Company’s Board. Also, if the nomination is done by Ace Cosmo, it will be done in the period between 1 July 2019 and 15 October 2019. Also, prior to 15 October 2019, Ace Cosmo will further acquire further shares of the company in order to gain 15% or more than 15% of interest in the company. This will make them eligible to appoint a non-executive director to the company.
Terry Cuthberston, the Chairman of Australian Whisky Holdings, greeted Ace Cosmo for making investment into the company as well as the Distribution Agreement for Hong Kong. He also states that the agreement with the Ace Cosmo is a positive step for the company.
The funds that is being raised will be used to continue the buy-back programme of whisky by June 2019, repay the previous debt, fund the second stage of infrastructure i.e. working on new bond stores as well as make plans for new distillery, increase inventory and also support general working capital.
The detail information about the placement along with the with the Hong Kong distribution agreement and funds worth $5 million invested by the Hong Kong distributor will be released under Appendix 3B. The 158,429,599 which are shares issued through Placement, will be issued pursuant to ASX Listing Rule 7.1 and 132,937,458 shares through Listing Rule 7.1A. The Company has also taken approval to further raise fund under placement by 10% placement capacity-based listing Rule 7.1A on 28 November 2017.
The number of securities issued under Listing Rule 7.1 is 158,429,599 and the number of securities issued under Listing Rule 7.1A is 132,937,458. The company also states that the shares issued to the sophisticated and professional investors is the most efficient and convenient methods of raising funds. This will provide support in increasing the working capital as well as the company objectives. For the placement, the company made no underwriting arrangement. The company needs to pay a fee of 1% as management fee and 4% fee for raising the funds from Bell Potter Securities Limited.
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