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- Dental centre operator Pacific Smiles Group (PSQ) has entered a trading halt as it finalises arrangements for a $20 million financing
- An initial $15 million will be raised pursuant to a jointly underwritten placement with Bell Potter Securities and Wilsons Corporate Finance
- A further $5 million will be raised according to a share purchase plan to eligible shareholders in Australia and New Zealand
- The proceeds will be used primarily to expand PSQ’s network with 15 new dental centres
- Pacific Smile Group last traded at $2.70 per share on Monday, March 1, and is expected to remain suspended from trading until tomorrow
Dental centre operator Pacific Smiles Group (PSQ) has entered a trading halt as it finalises arrangements for a $20 million financing.
An initial $15 million will be raised pursuant to a jointly underwritten placement with Bell Potter Securities and Wilsons Corporate Finance. The new shares in Pacific Smiles will be issued at $2.60 per share, representing a 3.7 per cent discount compared to the company’s closing price of $2.70 on March 1.
A share purchase plan to eligible shareholders in Australia and New Zealand will then seek to raise a further $5 million. Shareholders of Pacific Smiles registered as of March 1 will be able to purchase up to $30,000 worth of shares, also at $2.60 each.
All of the shares issued under both the placement and share purchase plan will be eligible for Pacific Smiles’ recently declared dividend of 2.4 cents per share.
The company said that while its new centre openings were reduced during the height of the COVID-19 pandemic, it is now in a strong position to grow its network with 15 new centres in the 2021 financial year.
It’s part of the company’s target to roll out at least 20 new centres each year. However, this target remains subject to specific locations that become available, leasing terms and the availability of dental practitioners.
“We believe this is the right time to strengthen our balance sheet as the Company prepares for the next phase of its growth,” said Phil McKenzie, CEO of Pacific Smiles Group.
“We see plenty of opportunity in the market, and while we will continue to be very disciplined with capital allocation, we believe positioning the Company to accelerate our rollout is a logical move,” he added.
Upon completion of the financing, Pacific Smiles is expected to have roughly $18 million in net cash — before financing costs — and $37 million in available debt facilities.
Pacific Smiles Group last traded at $2.70 per share on Monday, March 1, and is expected to remain suspended from trading until tomorrow.
