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- Bubs Australia (BUB) halts trade ahead of its underwritten $63 million capital raise to support the company’s growth initiatives and execute long-term strategic goals
- The equity raise comprises of an institutional placement of $32.4 million and a one for 10.42 pro-rata accelerated non-renounceable entitlement offer to raise $30.6 million
- The company is expecting approximately 121.2 million new shares at a price of 52 cents to be issued under the equity raising
- Following the completion of the raise and transaction costs, Bubs expects to be well capitalised to fund future growth opportunities
- Shares in Bubs end the day in the grey to close at 64 cents
Bubs Australia (BUB) has halted trade ahead of its underwritten $63 million capital raise to support the company’s growth initiatives and execute long-term strategic goals.
The equity raise comprises of an institutional placement of $32.4 million and a one for 10.42 pro-rata accelerated non-renounceable entitlement offer to raise the remaining $30.6 million.
The company is expecting approximately 121.2 million new shares at a price of 52 cents to be issued under the equity raising.
Proceeds of the raise will be used to fund working capital to assist with the immediate upscale of growth activities given the rapid market expansion.
It will also go towards expanding the company’s canning capability to include the second high-speed canning line at the Deloraine facility to triple capacity in order to meet the growth demand.
“Despite a challenging macro environment, Bubs is delighted to return to a high growth trajectory with record revenues and strong momentum across all key business segments, resulting in groupwide gross margin improvements and delivery of first profit,” Executive Chairman Denis Lin said.
“The equity raising will ensure that the company is well capitalised to pursue our growth opportunities going forward.”
Bubs is expecting its FY22 gross revenue to exceed $100 million and achieve more than $2.4 million in underlying earnings before interest, taxes, depreciation and amortisation (EBITDA).
The company confirmed it is the first year of EBITDA profitability and has been driven by proactive optimisation of product and channel mix, more efficient trade spend, improved supply chain efficiency and disciplined operating expenses.
Following the completion of the raise and transaction costs, Bubs expects to be well capitalised to fund future growth opportunities.
Eligible retail shareholders will be invited to participate in the retail component of the entitlement offer at the same offer price and ration as the institutional component.
It opens on July 12 and closes on July 26, while the institutional offer opens today and closes on July 6.
Settlement and placement of the institutional entitlement offer is expected on July 13 and allotment on July 14.
Shares in Bubs ended the day in the grey to close at 64 cents.
