Today, on 30th April 2019, EBOS Group Limited (ASX: EBO) updated to the market that its securities have been placed in a trading halt at the request of the company due to pending it releasing an announcement. At the time of such development, the stock was trading at $20.100 per share.
The company announced that it will undertake a placement of new fully paid ordinary shares of the same class as already quoted on the NZX and ASX. Pursuant to the clauses of the Financial Markets Conduct Regulations 2014 and the Financial Markets Conduct Act 2013, EBOS stated that this Placement is in reliance upon the exclusion in clause 19 of Schedule I to the FMC Act and this notice has been given under clause 20(1)(a) of Schedule VIII to the FMC Regulations. EBOS is in compliance with its financial reporting obligations and continuous disclosure obligations in relation to ordinary shares at the date of this notice. The placement is not expected to have any material impact on the control of EBOS. A separate notice will be given under S 708A(5)(e) of the Corporations Act 2001 (Cth) following the allotment of the shares pursuant to the placement.
EBO is conducting a fully underwritten, ~NZD 150 million placement to provide further capacity for the growth. Such proceeds will initially be used to pay debt taken from the bank and minimise gearing. Rest of the funds will be used for organic growth initiatives, strategic acquisitions, and overall corporate purposes as per the requirement.
Under this placement, the company will issue ~7,700,000 fresh ordinary shares at an issue price of NZ$19.70/sh to institutional investors in New Zealand, Australia, and designated jurisdictions to raise ~NZ$150,000,000. This issue price denotes an 8.0 percent discount to the closing price on NZX of NZD 21.42 on 29th April 2019. UBS will act as a Sole Underwriter and Lead Manager for the placement. These new shares to be issued will rank equally with the existing EBOS shares.
Key dates in relation to the placement are as follows:
In the last 12 months, EBOS has generated significant business achievements, which include - (1) Execution of an agreement with CWG (Chemist Warehouse Group) for the exclusive wholesale distribution of pharma products to above 450 CWG stores throughout Australia, (2) EBO moved to 100% ownership of the Terry White Group, (3) Footprint in the Australian medical and surgical supplies wholesale market with the acquisition of Warner & Webster (4) Strategic acquisitions of Therapon and Quitnits.
The company expects that these developments will generate a stronger return for its shareholders. At the completion of placement, pro forma net debt to EBITDA as on 31st December 2018, is expected to come down to ~ 1.60x from 2.16x. Lower gearing levels will assist the company to chase strategic acquisitions and organic growth initiatives.
The shares of EBO were last trading at A$20.100 on ASX (As on 26 April 2019).
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