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- Marine services provider MMA Offshore (MRM) will raise $80 million through a fully underwritten equity raise to reduce debt and strengthen its balance sheet
- The equity raise consists of an institutional and retail entitlement offer to raise $58.4 million through the issue of around 1.95 billion shares at 3 cents
- The raise also includes a placement, which will raise $21.6 million for new and existing investors
- Following the raise, MMA’s debt levels will be reduced by around $93.7 million
- The debt reduction comprises $78.6 million in cash, which MMA will repay, as well as a $15.1 million debt concession from exiting bank lenders
- MMA’s syndicated facility agreement will be amended to extend the loan until January 2025 and improve financial metrics
- MMA Offshore is yet to come out of a trading halt. Shares last traded for 6.4 cents on Tuesday, November 10
MMA Offshore (MRM) has announced a fully underwritten $80 million equity raising to reduce debt and strengthen its balance sheet.
The marine services provider entered a trading halt pre-market open today pending the capital raise announcement. Now, all the details have been released.
The equity raise consists of a one-for-0.475 accelerated non-renounceable pro-rata entitlement offer to raise around $58.4 million and a $21.6 million placement to existing and new investors.
The entitlement offer is split into an institutional and retail component. In total, around 1.95 billion new MMA shares will be issued at 3 cents per share. Under the placement, 718.7 million new MMA shares will be issued.
Positively, MMA’s debt levels will be reduced by around $93.7 million.
This debt reduction comprises $78.6 million in cash that MMA will repay from the equity raising. Of this $78.6 million, approximately $68.6 million will go to lenders exiting the syndicate and $10 million will go to the remaining lenders.
The remaining $15.1 million debt concession will come from three banking lenders exiting the current syndicate.
Following the debt reduction, MMA’s gross debt will reduce to around $172.9 million and pro-forma net debt as of September 30 would reduce to $86.5 million.
“The combination of the $80 million equity raising and approximately $15.1 million in debt concessions enables us to significantly reduce our debt, bringing our leverage metrics into a more appropriate range,” Managing Director David Ross said.
MMA’s syndicated facility agreement will be amended to extend the term of the loan to January 2025, reduce the banking syndicate to four banks, reset the covenants to align with the business’ outlook post-coronavirus, to provide an amortisation scheduled and to link the interest margin to MMA’s gross leverage ratio.
“We have a clear strategy to grow the business through focusing on our core activities, further value adding to our service offering via our subsea and project logistics groups, whilst diversifying into new markets including the growing offshore wind sector,” David concluded.
MMA Offshore is yet to come out of a trading halt. Shares last traded for 6.4 cents on Tuesday, November 10.
