Emeco launches entitlement offer to boost shareholder participation

By Caroline Salls

Pittsburgh, March 21 – Emeco launched a pro rata renounceable entitlement offer Tuesday, which will be fully underwritten by its shareholders and noteholders, according to a news release.

The company said the entitlement offer allows existing shareholders to further participate in the potential value to be created following the recapitalization of Emeco and the merger with Andy’s and Orionstone.

Eligible shareholders will have the opportunity to subscribe for new fully paid ordinary shares in Emeco at a price of $0.1088 per new share. Shareholders will also be invited to subscribe for 0.3066 new shares for every one existing share held at the March 27 record date.

A total of A$20 million will be raised through the offer.

The $0.1088 offer price represents a 45% premium to the latest closing price of $0.075 per share and a 33% premium to Emeco’s theoretical ex-rights price of $0.082 per share.

Eligible shareholders who do not want to take up some or all of their entitlement may sell their entitlement from March 24 to April 3 or transfer it directly to another person.

Existing shareholders will own 27% of the company’s shares after the entitlement offer, other participants will own 8%, 1% will be used to satisfy an underwriting fee, Black Diamond will own 22%, other Emeco noteholders will own 12%, Orionstone shareholders will own 10%, Orionstone creditors will own 11%, and Andy’s shareholders and creditors will own 5% each.

“The funds raised under the entitlement offer will be used to fund the transaction and will provide greater financial flexibility during the integration period,” Emeco managing director Ian Testrow said in the release.

“It is very pleasing to have our two biggest shareholders and largest bondholder demonstrate their continued support for and commitment to Emeco’s growth strategy by underwriting the entitlement offer.”

The entitlement offer will close on April 10. The new shares will be issued on April 19, and trading will begin on April 20.

Emeco is a provider of equipment solutions to the mining industry and is based in Perth, Australia. The company filed bankruptcy on Feb. 8, 2016 under Chapter 15 case number 16-13080.

© 2015 Prospect News.
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