- Harvey Norman has announced today its $174 million capital raising has fallen $7.8 million short
- The capital raise was aimed at paying $626 million worth of equity debt
- Interestingly, the capital raising was announced on the same day Harvey Norman shared a 7.2 per cent increase in offshore revenue
- Executive Chairman Gerry Harvey is concerned a recession is looming, attributing the cap raise to protecting the company
- Harvey Norman’s share price is slightly up 0.38 per cent, with shares trading at $3.99
Harvey Norman has today announced its $174 million capital raising has fallen short by $7.8 million.
The capital raise, unfortunately, fell short despite new shares being issued at a 46 per cent discount off the market price.
The entitlement offer was announced on August 30, 2019, and consisted of an offer to eligible shareholders to subscribe for one new share for every 17 existing ordinary shares held in the company.
The offer closed last Friday and shareholders applied to buy 66.27 million ordinary shares of the 69.4 million shares offered at $2.50 each – representing the shortfall of $7.8 million.
The electronics and home goods retailer announced the capital raise to help pay down $626 million of consolidated equity debt and ride out a potential retail recession.
Interestingly, the capital raise was announced on the same day the company announced a 7.2 per cent increase in offshore sales for the 2019 financial year.
Despite its overseas stores thriving, sales in Harvey Norman’s Australia franchises fell by $5.66 billion.
“I’m very conscious of the fact that we’re going to have another recession or depression one day, Executive Chairman Gerry Harvey stated in a Sydney Morning Herald interview.
The chairman spoke on the “rocky” state of the Australian retail and housing sector, claiming sales have slowed and preparations are in the domestic franchise’s best interest.
The capital raising was the company’s second in many years and followed a $164 million offer last year, also offered at $2.50 per share.
The new shares are scheduled for issue on Friday, October 18, 2019, and are expected to commence trading on a normal settlement basis from Monday 21 October 2019.
Harvey Norman’s share price is slightly up 0.38 per cent, with shares trading at $3.99 at 1:14 pm AEDT.