- Decmil Group (DCG) is set to launch a $50 million equity raising as it looks to strengthen its financial position
- As part of a business turnaround strategy, the additional funds are expected to assist in the pursuit of new contract opportunities
- The raising will be undertaken by way of an accelerated pro-rata non-renounceable entitlement offer on the basis of 4.2 new shares for every one existing share
- The shares will be issued at a price of five cents each, and will include both institutional and retail components
- Decmil Group shares remain voluntarily suspended, last trading for 20 cents each
Decmil Group (DCG) is set to launch a $50 million equity raising as it looks to strengthen its financial position.
Based in Western Australia, and specialising in construction, engineering and maintenance, the company offers a range of services to the resources and infrastructure industries.
The equity raising will be executed by way of an accelerated pro-rata non-renounceable entitlement offer on the basis of 4.2 new shares for every one existing share. These shares will be issued at a price of five cents each, representing a discount of 75 per cent in comparison to the company’s last closing price of approximately 20 cents on May 18, 2020.
Led by Hartleys, the equity raise is expected to include both institutional and retail components, generating up to $28.6 million and $21.6 million respectively.
However, completion of the offering is subject to a minimum of $40 million in firm commitments.
In a presentation also released today, the company noted that both Dickie Dique, Managing Director and CEO, and Peter Thomas, CFO, have committed to participating in the equity raising for up to $200,000 each.
Dickie said he believed the raising would secure strong support from both existing and new shareholders, endorsing the company’s turnaround strategy.
“Decmil had some significant challenges as we entered 2020, including a tight balance sheet. This capital raising addresses that issue and will set us up well to continue pursuing and delivering profitable new contract opportunities,” Dickie commented.
“We also expect that significant infrastructure spending in Australia over the next few years will further drive this turnaround and return Decmil to robust profitability and strong shareholder returns,” he added.
The institutional component is expected to open on May 29 and close on June 1, with trading to resume on an ‘ex-entitlement’ basis on June 2.
Likewise, the retail component will open on June 5 and close on June 17, with normal trading of the new shares to commence on June 25.
Decmil Group shares remain voluntarily suspended, last trading for 20 cents each.