PGF Announces Share Placement and Purchase Plan to Raise Capital
PM CAPITAL GLOBAL OPPORTUNITIES FUND LIMITED (PGF) Share Update July 2024 Tuesday 30th
PM Capital Global Opportunities Fund Announces Share Placement and Purchase Plan
PM Capital Global Opportunities Fund Limited (ASX: PGF) has announced a significant capital raising initiative through a share placement and share purchase plan, aiming to raise up to $120 million.
Instant Summary:
- Non-underwritten placement to raise up to $100 million.
- Share Purchase Plan (SPP) targeting an additional $20 million.
- New shares to be issued at $2.19, a 6.4% discount to the last traded price.
- New shares will rank equally with existing shares and are eligible for FY24 dividends.
- Reaffirmed dividend guidance with a minimum of 10 cents per share for FY25.
Details of the Capital Raising
PM Capital Global Opportunities Fund Limited (PGF) has announced a non-underwritten placement of shares to certain wholesale and sophisticated investors, aiming to raise up to $100 million. This will be complemented by a non-underwritten Share Purchase Plan (SPP) targeting an additional $20 million from eligible shareholders.
The offer price for the new shares is set at $2.19, representing a 6.4% discount to the last traded price of $2.34. This price is also equal to the estimated pre-tax Net Tangible Assets (NTA) per share as of 26 July 2024. The new shares will rank equally with existing shares from the date of issue and will be entitled to receive the FY24 full-year dividend if held on the relevant dividend record date.
Purpose and Benefits
The capital raised will be invested in line with PGF's existing investment strategy, managed by PM Capital. The issue of new shares is expected to grow PGF's assets, provide greater market liquidity, and allow shareholders to increase their shareholding without incurring brokerage costs.
Dividend Guidance
PGF has reaffirmed its intention to pay a minimum of 5.0 cents fully franked dividend for the second half of 2024 and announced a forward guidance of a minimum of 10.0 cents fully franked dividend for the financial year 2025. Based on retained earnings and profit reserves as of 30 June 2024, the company has sufficient coverage for 7.8 years of fully franked dividends.
Timeline and Participation
The placement will close on 31 July 2024, and the SPP will open on 9 August 2024. Eligible shareholders who were registered on the share register at 7:00 pm (Sydney time) on 29 July 2024, with a registered address in Australia or New Zealand, can apply for up to $30,000 worth of PGF shares without incurring any brokerage, commission, or transaction costs.
The announcement of the share placement and SPP is likely to have a mixed impact on PGF's stock price. While the capital raising will provide the company with additional funds to invest and grow its assets, the dilution of existing shares may cause some short-term volatility in the stock price. However, the reaffirmed and updated dividend guidance may help maintain investor confidence.
Investor Reaction:
Analysts are likely to view the capital raising as a positive move for the long-term growth of PGF. The discounted offer price and the potential for increased market liquidity are seen as beneficial. However, some investors may be concerned about the dilution of their existing shareholdings.
Conclusion:
Investors should consider participating in the share placement and SPP to take advantage of the discounted offer price and the potential for long-term growth. Monitoring PGF's performance and strategic investments following the capital raising will be crucial in assessing the impact on their portfolios.