Rod probably needs that $30m elsewhere
He’ll have to live with the dilution eh ...19% becomes a lot less.
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Rod's too much of a prudent business man to risk what he has for more.
Briscoes has $67 million cash on the balance sheet, with 18.9% shareholding even for this raise Briscoes would have to put in $33 million to maintain their currently holding, never mind a takeover.
SP will track closer to the issue price. That is the most common way issues go from my experience.
He would have been approached under the $30m placement at 50 cents for sure so would have had ample time to carefully consider this capital raise already. Arguably the smartest man in retail in N.Z. That he has declined to participate at just 50 cents gives all shareholders of KMD and other retail companies a valuable insight into the seriousness of challenges he foresees ahead. Hope the underwriters have deep pockets.
Rather telling indeed - unless he wants the sp to really tank during and post the capital raise and then, make his move then?
Not taking up his 'entitlement' means the underwriters are already in the gun for around $35m of the $177m rights issue. :eek2:
Looks like sp could drop to 51c - 53c with that kind of overhang!
Net debt after capital raise will drop to around $80m vs SHF of $780m - so should be okay.
Only problem is that bulk of balance sheet consists of $635m intangibles! :eek2:
No question in my mind that this is a bank forced capital raise.
Thank goodness KMD has got underwriting in place.
We do not want another Pumpkin Patch - NZ needs our home grown brands.