AusGroup raises S$15.2m in capital

Placement agreement struck with DBS.

SGX-listed AusGroup Limited announced that it has entered into a conditional placement agreement with DBS Bank Ltd. that will see the group’s financial position strengthened by a capital injection of approximately S$15.2m.

The announcement underpins the group’s restructuring activities - aimed at targeting new opportunities in a changing market, focusing on customer needs and driving operational efficiencies.

Placement agreement with DBS Bank Ltd. for an aggregate of 96,100,000 new ordinary. Issue price of S$0.168 per share represents a discount of 8.5% from the weighted average price (based on 30-31 December 2013 SGX-ST trades) for a gross consideration of S$16,144,800.

Placement Shares represent approximately 19.9% of the total of number of issued shares of the company at the date of the announcement. The Net Proceeds are intended to be used for general working capital purposes and to collateralise the Group’s future bonding requirements.

AusGroup recently fully repaid its senior debt facilities and cash-backed all bank guarantees with the group’s club bank facility of Australia & New Zealand Banking Group Limited and HSBC Australia Pty Ltd. Work-in-hand now stands at A$219.1 million (30 November 2013).

AusGroup CEO and Managing Director Stuart Kenny said the strong support for the placement was market endorsement of the company’s strategic approach and longer term outlook.

“The placement is a great way to start the year, boosting working capital as we work closely with new and existing customers to target opportunities in a changing market.

“Our business model is well placed to deliver a suite of integrated skills and services as projects enter long-term operation, following an unprecedented construction period in Western Australia.

“We also expect to continue increasing our exposure to the growing oil and gas sector in the coming year.

“Combined with the recent repayment of senior debt, this is positive news as we set about building market confidence, delivering for our customers and creating a platform for enhancing shareholder value.”

Subject to satisfaction of conditions, the placement is expected to be completed by the end of this month.

The finalisation of new banking arrangements is also on track for completion in early 2014 and will represent a further injection of working capital into the business.