Toys“R”Us ANZ Secures $4 Million Funding to Launch House of Brands Growth Strategy
TOYS'R'US ANZ LIMITED (TOY) Share Update July 2024 Tuesday 9th
Toys“R”Us ANZ Secures $4 Million Funding for Growth Strategy
Toys“R”Us ANZ Limited (ASX: TOY) has announced a significant funding boost of up to $4 million to support its House of Brands growth strategy. This funding comes from a combination of new and existing investors, along with a substantial investment from Mercer Street Global Opportunity Fund II LP.
Instant Summary:
- Secured $2.49 million via Placement.
- Directors to participate in Placement with $50,000 commitment.
- Additional $1.5 million investment from Mercer Street Global Opportunity Fund II LP.
- Total funding of up to $4 million to support growth strategy.
Funding Details
Toys“R”Us ANZ Limited (ASX: TOY) has successfully secured $2.49 million in funding through a Placement to new and existing institutional and sophisticated investors. The Placement involves the subscription of approximately 35.57 million fully paid ordinary shares at an issue price of $0.07 per share.
Participants in the Placement will receive one free attaching option for every two new shares subscribed, exercisable at $0.12 per share and expiring three years from the date of issue. Directors have also committed to subscribe for 714,286 shares under the Placement, contributing $50,000 at the same price and terms.
Mercer Investment
In addition to the Placement, TOY has reached an agreement with Mercer Street Global Opportunity Fund II LP for an additional investment of up to $1.5 million from the existing $4.2 million convertible securities facility. This investment will be made in two tranches.
Tranche 1 involves a subsequent investment of $785,000 by way of convertible securities with a face value of $863,500. This funding is not subject to shareholder approval and will enable TOY to reinvest in core stock and place deposit orders for the significant sales period in Q2 FY 2025.
Tranche 2, subject to shareholder approval, will involve a further $715,000 investment by way of convertible securities with a face value of $786,500, dependent on mutual agreement of the parties at the time of issue.
Strategic Objectives
This funding is a crucial step in TOY's strategic objective to build a diversified House of Brands. The company plans to leverage this funding to capitalize on the hard work done in recent months to right-size the business and launch the TOY House of Brands Growth Strategy.
Alpine Capital Pty Ltd and Bell Potter Securities Limited acted as Joint Lead Managers for the Placement. Full details of the Placement and the indicative offer timetable can be found in the Equity Raising Investor Presentation issued to ASX.
The secured funding is expected to have a positive impact on Toys“R”Us ANZ's stock as it supports the company's growth strategy. The involvement of institutional and sophisticated investors, along with the substantial investment from Mercer, signals strong confidence in the company's future prospects. This could lead to increased investor interest and a potential rise in stock value.
Investor Reaction:
Analysts have expressed optimism about the funding, noting that it provides TOY with the necessary resources to implement its growth strategy effectively. Investors are likely to view this development positively, as it demonstrates the company's commitment to expanding its brand portfolio and enhancing shareholder value.
Conclusion:
Investors should keep an eye on the upcoming Extraordinary General Meeting (EGM) and the subsequent implementation of the House of Brands growth strategy. This funding marks a pivotal moment for Toys“R”Us ANZ, and its successful execution could yield significant returns for investors.