On 7 March 2019, Quickstep shares crashed 6.667% in early trade after the company announced its capital raising program via the share placement and share purchase plan at a discounted price. The stock declined 6.667% to trade at $0.084 (1:22 PM AEST) following the lifting of trading halt that was placed on 6 March 2019.
The Group announced that it has received irrevocable commitments to raise A$10.625 million through a placement of 125 million fully-paid ordinary shares to institutional and sophisticated investors. It outlines the issue price of $0.085 per share, representing a 9.1% discount to the volume weighted average market price (VWAP) of Quickstep’s shares over the five trading days prior to the trading halt.
With the funds raised from this share placement, Quickstep Holdings Limited (ASX: QHL) intends to strengthen its balance sheet to allow flexibility to accelerate future growth projects and reduce the level of debt.
On the regulatory front, Quickstep explained that this time shareholders’ approval is not required as the Group will issue the entire 125 million shares under its 15% and an additional 10% placement capacity. Moreover, an independent Australian stockbroking firm, Curran & Co., has been selected to act as a Sole Book Runner and Lead Manager to the placement.
Australia’s largest producer of independent aerospace-grade advanced composite, Quickstep Holdings, also offered a Share Purchase Plan (SPP) to its eligible shareholders under which they have been given an opportunity to acquire up to $15,000 worth of shares at an issue price same as that for Share Placement, i.e., $0.85 per share.
No brokerage or transaction cost has been added to the plan, and the participation in it has been offered entirely at shareholder’s discretion. For this purpose, the shareholders include only those members who were registered as holders of shares on the record date of 6 March 2019 with the registered address of Australia or New Zealand.
Managing Director of Quickstep, Mr Mark Burgess, said: “Quickstep continues to make outstanding progress in its operational and financial performance. The company is addressing significant new business opportunities that require a stronger balance sheet which provides the headroom for growth. The management is delighted that the Group has received such strong demand from a broad range of institutional investors who believe in the company and its vision to be a leading global supplier of advanced composite solutions.”
The SPP offer is scheduled to be open from 13 March 2019 to 27 March 2018. It has been described as a non-renounceable offer which is also not underwritten. Quickstep told that it reserves the right to alter the schedule or/and run an appropriate scale-back policy if required.
QHL is currently trading at a Price to Earnings multiple of 56.250 x with a market capitalisation of $50.76 million. Over the past 12 months to date, 7 March 2019, the stock has returned a decent yield of 7.14% with as high as 20.0% returns in just past three months.
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