Seven Group Holdings announces USD375 million equity raising

KKR

Seven Group Holdings Limited has announced that it is conducting a fully underwritten USD375 million placement of ordinary shares to institutions and sophisticated investors and a non-underwritten Share Purchase Plan (“SPP”) to raise up to approximately USD25 million.

According to a statement by Seven Group Holdings, The Equity Raising is being undertaken for the following reasons:

* Increase the free float of SGH from 26.4 per cent to 34.61 per cent;
* Provide capacity to support future portfolio enhancements following completion of the Coates Hire acquisition; and
* Reduce SGH’s leverage (pro-forma net debt / pro-forma FY17 EBITDA) from 3.8 times to 3.1 times, which provides SGH with greater balance sheet flexibility as it pursues other growth opportunities.

Equity Raising The Equity Raising follows the receipt of overwhelmingly positive investor feedback in relation to SGH’s acquisition of the remaining 53.3 per cent interest in Coates Hire announced today (“Coates Hire Acquisition”).

The combination of the Coates Hire Acquisition and underwritten Placement remains financially compelling and results in 12 per cent accretion in underlying EPS in FY17 on a full year pro-forma basis2 and a 71 per cent increase in underlying free cash flow per share3.

Placement
The Placement will comprise the issue of approximately 33.5 million fully paid ordinary shares at an issue price of $11.20 to institutional and sophisticated investors in Australia and internationally to raise approximately $375 million. The new shares issued under the Placement will be issued pursuant to the Company’s 15 per cent capacity under ASX Listing Rule 7.1. The issue price of $11.20 represents an 8.8 per cent discount to the closing price of $12.28 on 20 September 2017.

Share Purchase Plan
Following the completion of the Placement, SGH intends to undertake a non-underwritten SPP to raise up to approximately $25 million. The SPP will provide eligible retail shareholders in Australia and New Zealand with the opportunity to participate in the Equity Raising at the Placement price of $11.20.

Eligible shareholders who are registered as SGH shareholders as at 7.00pm (AEDT) on 20 September 2017 will be invited to subscribe for up to a maximum of $15,000 of additional New Shares per eligible shareholder, free of brokerage and transaction costs.

SGH may (at its absolute discretion) elect to scaleback the maximum amount per shareholder if total demand exceeds $25 million. However, in a situation where total demand exceeds $25 million, SGH may (at its absolute discretion) decide to increase the cap to reduce or eliminate the need for scaleback.

The SPP is subject to the terms set out in the SPP booklet, which will be lodged with ASX and sent to eligible retail shareholders in due course. As with the New Shares issued under the Placement, the New Shares issued under the SPP will rank equally with existing ordinary SGH shares.