NTAW Holdings Limited Announces $12.41 Million Capital Raising to Support Dunlop Tyre Distribution
NTD (NTD) Share Update September 2024 Tuesday 17th
NTAW Holdings Announces $12.41 Million Capital Raising
NTAW Holdings Limited (ASX: NTD) has announced a significant capital raising initiative to support its new Dunlop tyre distribution business in Australia and New Zealand.
Instant Summary:
- NTAW Holdings to raise $12.41 million through a 1 for 4 entitlement offer.
- Offer price set at $0.37 per share, a slight discount to recent trading prices.
- Proceeds to fund working capital for Dunlop tyre distribution and cover offer costs.
- Directors and substantial shareholders to participate in the offer.
- Entitlement offer opens on 26 September 2024 and closes on 10 October 2024.
Capital Raising Details
NTAW Holdings Limited (ASX: NTD), a leading importer and distributor of tyres and wheels in Australia, New Zealand, and South Africa, has announced a pro-rata non-renounceable entitlement offer to raise approximately $12.41 million. The offer will be conducted at a price of $0.37 per share, representing a 4.0% discount to the company's volume-weighted average share price over the past 15 days, a 1.3% discount to the last closing price, and a 1.1% discount to the Theoretical Ex-Rights Price (TERP).
Eligible shareholders will be able to subscribe for 1 new share for every 4 shares held as of the record date on 23 September 2024. The entitlement offer is non-renounceable, meaning that entitlements cannot be transferred or traded on the ASX.
Use of Proceeds
The funds raised from the entitlement offer will be used primarily to support the company's new distribution agreement with Dunlop tyres in Australia and New Zealand. Specifically, $12.01 million will be allocated to working capital for the Dunlop tyre distribution business, while $0.4 million will cover the costs associated with the entitlement offer.
Director Participation
Several directors of NTAW Holdings have indicated their intention to participate in the entitlement offer. Mr. Murray Boyte, Mr. Chris Hummer, Mr. Peter Ludemann, Mr. Terry Smith, and Mr. Tynan Young will collectively subscribe for approximately 6.6 million new shares, representing around 14.13% of the new shares to be issued.
Ineligible Shareholders
The company has determined that it is unreasonable to extend the offer to shareholders with registered addresses outside Australia and New Zealand due to regulatory and legal constraints. Instead, Taylor Collison Limited has been appointed as a nominee to sell the new shares that would have been offered to ineligible shareholders, with the net proceeds distributed to them proportionately.
Underwriting Arrangements
The entitlement offer will be underwritten by Exldata Pty Ltd, a company associated with Mr. Tony Young, a substantial shareholder in NTAW Holdings. The underwriting agreement ensures that the offer will be fully subscribed, providing financial stability for the company's expansion plans.
The capital raising initiative is expected to have a positive impact on NTAW Holdings' stock as it demonstrates the company's commitment to expanding its business operations and securing a significant distribution agreement with Dunlop tyres. The slight discount on the offer price may attract existing shareholders to participate, thereby increasing liquidity and investor confidence.
Investor Reaction:
Analysts are likely to view the capital raising positively, given the strategic importance of the Dunlop tyre distribution agreement. The participation of key directors and substantial shareholders further underscores confidence in the company's growth prospects.
Conclusion:
Investors should consider participating in the entitlement offer to support NTAW Holdings' expansion into the Dunlop tyre market. The company's strategic initiatives and the backing of substantial shareholders present a promising opportunity for long-term growth.