On 1 October 2018, Nufarm Limited (ASX: NUF) made an announcement regarding the successful completion of the Institutional Entitlement Offer of its fully underwritten 3 for 19 pro rata accelerated renounceable entitlement offer with retail rights trading. Following this news, the share price of the company tumbled by 8.657% as on 1 October 2018.
Earlier on 26 September 2018, the company announced the Entitlement Offer to raise around $303 million with the objective of maintaining the strong financial position to manage its short-term balance sheet risk and support the continuation of the company’s growth strategy in the uncertain market. On 27 September 2018, the entitlement offer was closed, and it raised around $238 million from subscriptions for new fully paid ordinary shares at a price of $5.85 per New Share. The bookbuild from the shortfall shares was conducted from 27 September 2018 to 28 September 2018 to attract strong demand from existing shareholders and other institutional investors. The bookbuild was cleared at a price of $6.35 per new share which includes a premium of $0.50 to the offer price of $5.85 per new share and a discount of 2.8% to the theoretical ex-rights price of $6.53. Certain ineligible institutional shareholders and eligible institutional shareholders who decided not to take up their entitlements will be paid $0.50 for each entitlement sold through the Institutional Shortfall Bookbuild and the payments will be made on or around 10 October 2018.
The next stage of this Entitlement offer is the Retail component which is expected to raise around $65 million and it will open on 4 October 2018 and close on 17 October 2018. Under the Retail Entitlement Offer, the eligible retail shareholders are being given an opportunity to opt for 3 New Shares for every 19 existing shares held as at the Record Date of 1 October 2018 at the Offer Price of $5.85 per New Share. And, if retail shareholders decided not to take up all or part of their Retail Entitlements then they have an option to sell all or part of their Retail Entitlements on the ASX or by transferring entitlements directly to another person before the retail shortfall bookbuild.
NUF’s shares traded at $6.120 at a market capitalization of $2.54 billion as on 1 October 2018 (AEST 1:24 PM).
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