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Highlights
- Link Group sold 10% of its stake in PEXA, generating net proceeds of AU$101.9 million.
- Shares of Link were in the red, down 0.434% as of 11:52 AM AEDT, 21 November.
- The company will be left with a 32.77% stake in PEXA post this selldown.
Australia-based Link Administration Holdings Limited (ASX:LNK) confirmed the sale of 10% of its existing 42.77% stake in PEXA Group Limited (ASX:PXA) on Monday (21 November).
This confirmation came further to its ASX announcement on 18 November, where Link Group mentioned executing trades for the sale of 10% shareholding in PEXA. Link Group generated net proceeds of AU$101.9 million, representing 4.3% of the issued capital in PEXA.
Following the update, shares of Link Group were trading in the red zone, down 0.434% at AU$3.435 apiece at 11:52 AM AEDT, 21 November. With today’s decline, Link Group’s share value has shed 1.86% in the last five trading sessions and dropped by 24.34% over a six-month period. On a year-to-date (YTD) basis, shares of Link have fallen by 38.33% while increasing by 4.41% in the last month.
Details of the selldown
Australian fund management services provider will use the net proceeds from this selldown to pay the company’s debt. Each PEXA share the company owns will be sold for AU$13.50, and the settlement is scheduled to take place by 23 November 2022, as per the ASX release.
As of 30 June 2022, Link Group's total leverage ratio (TLR) before the PEXA shares’ sale and pro forma TLR after the sale were 2.58x and 2.21x, respectively. The company looks forward to an in-specie distribution of the remaining PEXA shares to its shareholders upon receiving their approval. The shareholder approval is expected to be requested in December 2022. Once approved, the distribution process will take place in January 2023.
The distribution is also subject to the Link Group board’s approval which is currently scheduled for 22 November 2022.
Link Group's TLR post-PEXA stake sale and distribution would be 2.44x as of June 30, 2022, after further adjusting for the anticipated in specie distribution of the remaining Link Group’s PEXA shares. This is in line with the TLR of 2.0 to 3.0x that Link Group has set as its ideal capital structure.
