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Metarock Group Limited (ASX: MYE) saw its shares rise by 7.14% to 26.3 cents during afternoon trade on 31 May 2024. The increase follows the company’s announcement of the successful completion of the sale of its PYBAR business to Thiess Pty Ltd, a wholly owned subsidiary of Thiess Group Holdings Pty Ltd.
Details of the Transaction
Metarock had previously announced the sale on March 18, 2024. The transaction has now been finalized, with net cash proceeds amounting to approximately AU$42.9 million after deducting transaction costs, repaying PYBAR’s invoice finance facility, and settling PYBAR’s outstanding net debt from the agreed enterprise value of AU$65 million.
Financial Impact and Debt Repayment
The proceeds from the transaction have significantly strengthened Metarock’s balance sheet, positioning the company with net cash. Approximately AU$2.9 million of the proceeds were used to fully repay the outstanding deferred consideration from the original acquisition of PYBAR by Metarock. Additionally, AU$3.0 million was allocated to the full repayment of the M Resources shareholder loan.
As of May 31, 2024, Metarock’s outstanding debt was reduced to approximately AU$4.8 million in asset finance. The company also retains an invoice finance facility with a reduced limit of AU$7.5 million, which remains available for future use.
Strategic Focus Post-Transaction
With the completion of the PYBAR sale, Metarock is now concentrating on its core business: the Mastermyne specialist underground mining services. This includes Wilson Mining’s polymeric strata control products and Mynesight training services. The recapitalisation provides Metarock with a robust platform for growth, enabling the company to capitalize on its significant opportunity pipeline.
Future Plans and Refinancing
Apart from the PYBAR transaction, Metarock is making significant progress in the refinancing process to replace its Westpac invoice finance facility. This strategic move is expected to further enhance the company’s financial stability and support its growth initiatives.
Market Reaction
The market has reacted positively to these developments, as evidenced by the 7.14% increase in Metarock’s share price. Investors appear confident in the company’s strengthened financial position and its focused strategy moving forward.
