Steel & Tube Holdings Limited (NZX: STU) advises that it intends to raise approximately $80.9 million to recapitalise its
balance sheet and allow it to execute its business transformation initiatives and achieve its longer term strategic
objectives.
The capital will be raised by way of a $20.8 million Placement to selected institutions and other eligible persons at
$1.15 per share followed by a fully underwritten pro rata 1 for 1.9 Rights Offer at NZ$1.05 per share and a shortfall
bookbuild.
Chair of Steel & Tube, Susan Paterson, said: “We remain deeply committed to rebuilding Steel & Tube as a leading provider of steel products and solutions in New Zealand. We have worked hard to address legacy issues
and early benefits from ‘Project Strive’ business transformation initiatives are now being seen.
“The capital raised will be used to repay debt, strengthening our balance sheet and giving us greater flexibility to
execute our strategy and deliver better value for our shareholders. In addition, we expect the capital raising to
strengthen Steel & Tube’s share register and help create liquidity which will benefit all shareholders.”
• Steel & Tube is recapitalising its balance sheet to allow it to execute its business transformation initiatives and achieve its
longer term strategic objectives.
• The company is raising NZ$80.9 million via a $20.8 million Placement at $1.15 per share followed by a fully
underwritten pro rata 1 for 1.9 Rights Offer at NZ$1.05 per share.
• A bookbuild will be undertaken at the end of the Offer period for any shortfall; shareholders not taking up their
rights may receive value for their rights through this process.
• FY18 results are expected to be slightly ahead of guidance with an EBIT loss of approximately ($36.2) million compared
to ($38.0) million and normalised EBIT[1] of $16.5 million, compared to $16.0 million announced in the 23 May 2018 guidance statement.
• Given the capital raising, a final FY18 dividend will not be paid. Dividends are expected to be resumed in FY19
consistent with Steel & Tube’s stated policy of paying 60-80% of normalised NPAT.
• FY19 EBIT guidance is of at least $25.0 million, with normalised EBIT of $35 million to $40 million expected to be
achieved in the next three years.
Read the full announcement attached.
ends