Wholesaler Metcash has successfully raised $300 million in capital by selling off 107 million new shares.
The shares were placed up for sale yesterday at a discounted price of $2.80, down 7.9% on the $3.04 at the ASX close of trade on Friday, when the sale was announced.
The new shares were quickly snapped up by existing institutional investors, who accounted for 95% of the sales. The total sold equates to 11.8% of Metcash’s existing shares.
Equity raised through the placement will be used to strengthen their balance and ‘enhance liquidity’.
They plan to raise a further 30 million through other share holders through a share purchase plan, while $180 million in additional short term commited debt will be facilitated through existing lenders.
Metcash will also use the cash to help their retailers, who include IGA, Foodland, Mitre 10 and Cellarbrations, through the uncertain economic conditions of COVID-19.
As well as fund further investment in their MFuture growth program, fund against contingent liabilities and strengthen their position for potential growth opportunities.