AAC RAISES $56.3 MILLION
11 May 2011,
AUSTRALIAN Agricultural Company (AAC) has raised $56.3 million via equity placement to pursue further growth.
The company will provide an offer to shareholders of up to $15,000 of shares through a Share Purchase Plan (SPP) to be capped at $30 million.
Proceeds from the equity raising will be used to provide financial flexibility to pursue growth while maintaining target - gearing levels of less than 40 per cent.
The company also expects to deliver EBITDA of between $60 and $65 million for 2011 with earnings tipped to be weighted primarily towards the second half.
Following the termination of a major food services contract and weak performance, the Chefs Partner component of the business will cease operations. As a result, a $4.2 million provision has been made in 2011F, primarily comprising an impairment of goodwill and other business finalisation costs.
CEO David Farley says the company completed the first year of a three year strategic plan in 2010 focused on transforming itself from a pastoral company into a vertically integrated beef producer and value added processor.
“Progress on strategic initiatives has continued in 2011 with the announcement of the acquisition of the Tipperary herd and agistment arrangements in March 2011,” he says.
“As part of the strategic plan, the company continues to review various vertical integration options including a proposed meat processing facility in the Northern Territory.”
AAC has a market cap of around $430 million. The company came in at No. 22 on Brisbane Business News’ 2011 Top 50 Public Companies list.
AAC shares are trading at $1.55 with no change.