2 June 2016, Written by Brisbane Business News

CARDNO has announced a capital raising to reduce debt and lower its leverage ratio.

The capital raising will be fully underwritten to A$92.5 million.

Funds will be raised through an accelerated institutional entitlement offer and a retail entitlement offer with a retail over-subscription facility.

The entitlement offer price is 40c per new Cardno share.

Cardno expects to be in compliance with its debt covenants at 30 June 2016 after the impact of the entitlement offer.

Richard Wankmuller, managing director of Cardno, says the company will reduce its net debt from $311 million in June 2015 to a forecast $91 million at June 2016.

"The financial risk of the business has materially reduced," says Wankmuller.

"Our objective is to ensure Cardno is building a leading engineering and environmental professional services business focused on the commercial needs of its clients.

"Cardno cannot be focused on short term covenant issues and medium term organic growth at the same time this capital raising places Cardno in a strong position to rebuild value for shareholders in the medium term."

Crescent Capital Partners, currently a 41.4 per cent shareholder in Cardno, has committed for up to 30.5 million shares above its pro-rata entitlement of 95.8 million shares.

This could increase Crescent's interest to a maximum of 47.8 per cent.

Under the entitlement offer, eligible shareholders are invited to subscribe for 1 new Cardno share for every 1.07 existing Cardno share.

Approximately 231 million new Cardno shares will be issued under the offer.

Institutional shareholders can participate from Thursday 2 June to Friday 3 June, while retail shareholders can participate between Wednesday 8 June and Monday 20 June.

Author: Brisbane Business News Connect via: Twitter





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