Alliance Aviation (ASX:AVQ) - Managing Director, Scott McMillan (left)
Managing Director, Scott McMillan (left)
Source: Morning Bulletin
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  • Alliance Aviation (AQZ) is hoping to pull off a sky-high $121.9 million capital raise
  • The proceeds will enable the company to invest in growth initiatives, which will predominantly involve new aircraft
  • The company is set to raise $91.9 million through a placement of new shares and up to $30 million via a share purchase plan for existing shareholders
  • Alliance has also extended the term of its debt facilities, a $70.2 million and $5 million working capital facility ($4.5 million undrawn), until January 2022
  • Managing Director, Scott McMillan, said maintaining a strong balance sheet was a major focus of the board — now more than ever after the COVID-19 pandemic decimated the aviation industry
  • Alliance is in a trading halt following the announcement, and last traded shares for $3.10

Alliance Aviation (AQZ) is hoping to pull off a sky-high $121.9 million capital raise so it can invest in new aircraft.

The company is set to raise $91.9 million through a placement of new shares and up to $30 million via a share purchase plan (SPP) for existing shareholders.

The new shares offered in the placement and SPP can be purchased for $2.95 each, which is a 15 cent discount on today’s closing price of $3.10.

Alliance’s Managing Director, Scott McMillan, said the company was in a unique financial position, despite the COVID-19 pandemic decimating the aviation industry.

“Alliance’s recent performance has been outstanding and allows us to be uniquely positioned to look to expand through a number of growth initiatives,” he said. “Importantly, this capital raising will give us the ability to invest in these initiatives whilst maintaining our strong balance sheet.”

“Maintaining a strong balance sheet has been the focus of the Board for a number of years and is something we will jealously guard,” Scott continued.

Alliance has also extended the term of its debt facilities, a $70.2 million and $5 million working capital facility (with $4.5 million undrawn), until January 2022.

“We are pleased to announce that Alliance has been able to successfully extend its debt facilities with our banking partners being the Australia and New Zealand Banking Group and the Commonwealth Bank of Australia until January 2022,” Scott said.

“Completing an extension at this time further cements the strong and long-standing relationship Alliance has with its banking club, (and) we intend to undertake a formal refinancing process in 2021,” he explained.

The new shares offered under the placement are due to be settled by mid next week, while the SPP opens on Friday June 19 and closes on Thursday 9 July.

Alliance is in a trading halt following the announcement, and last traded shares for $3.10.

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