Plumbing supplies business Reece Plumbing is raising $600m through JPMorgan to strengthen its balance sheet.
It is also suspending dividends temporarily as it battles the impact of the coronavirus.
Reece said it will raise $232 million via an accelerated pro-rata non-renounceable entitlement offer and $368 million through an institutional placement of shares.
Shares are being sold at $7.60 in a deal announced to the market Monday. The stock is in a trading halt.
The price is a 12 per cent discount to the company’s last closing price.
The raise, designed to offer balance sheet strength, is fully underwritten.
Reece said its major shareholder, the Wilson family, supports the raising and would subscribe for A$170 million of new shares.
The company also intends to launch a share purchase plan, which isn’t underwritten.
“This capital raising will set up Reece for the future,” chief executive Peter Wilson said. “It will enable us to navigate through this period of uncertainty from a position of strength, and importantly it provides us with the flexibility to accelerate our growth strategy and pursue opportunities that may emerge.”
With Dow Jones Newswires
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