- DXN (DXN) plans to sell all business assets and subsidiaries to Flow2Edge Australia for about $26 million
- The company will use the funds to pay off its debts and make a distribution to shareholders of between 1.1 and 1.3 cents per share
- However, DXN flags the final distribution is not certain and will depend on transaction costs and the repayment of the $4 million debt facility
- To fund its working capital position up until the transaction, DXN will undertake a placement to raise $2.13 million
- Shares in DXN last traded at 0.6 cents on August 4
DXN (DXN) has planned to sell all business assets and subsidiaries to Flow2Edge Australia for about $26 million.
The funds from the transaction will be used to pay off its debts and make a distribution to shareholders.
This is currently estimated to fall in the range of 1.1 and 1.3 cents per share, representing an 88 to 123 per cent premium on the three-month volume weighted average price.
However, DXN flagged the final distribution is not certain and will depend on transaction costs and the repayment of the $4 million debt facility.
The sale is subject to an Independent Expert’s Report and shareholder approval.
Chairman John Ballie said the decision was not taken lightly.
“This transaction is not only a good offer, it also enables us to address the capital requirements for the business going forward,” he said.
“Further, it leverages the experience and footprint of FLOW Digital Infrastructure.”
To fund its working capital position up until the transaction, DXN will undertake a placement to raise $2.13 million.
The company will issue about 250 million new shares at 0.85 cents each, representing a 70 per cent premium to its last closing price.
Pure Asset Management has committed to subscribe to two-thirds of the placement. This follows DXN’s breach of financial covenants in a previously executed facility agreement between the companies.
Shares in DXN last traded at 0.6 cents on August 4.