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G8 EDUCATION (ASX: GEM) has squeezed out a $31.8 million investment from Chinese Group CIPI after it was initially unable to come up with the funds as part of a deal which was agreed in February.
China First Capital Group Partners International (CIPI) settled tranche 1 of its investment in February, which equalled $63 million, but reneged on paying for tranche 2 which amounted to $149 million.
The Gold Coast-based G8 amended tranche 2 which meant CIPI were issued 8.2 million shares at $3.88 per share which represents $31.8 million of proceeds to the company.
"We are pleased to finalise the revised placement which represents the final stage of the investment by CIPI originally announced on 20 February 2017," G8 managing director Gary Carroll says.
G8 Education had the right to sell CIPI's tranche 1 shares had they not reached settlement on tranche 2.
Between February and May, CIPI hit the market looking for a margin loan to fund tranche 2 but failed to secure the money and for a while it looked as though the deal was dead in the water.
Carroll says the funds raised will be used to pay down debt and partly fund child care centre acquisitions totalling around $200 million which are expected to settle between now and mid-2019.
The CIPI deal was part of its acquisition strategy to raise a total of $100 million through fully underwritten institutional placements.
Property investors have been closely monitoring G8 Education's expansion plans as the child care sector is regarded as being one of high growth.
At around 11am AEST GEM shares were just under two per cent higher at $3.48.
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