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- Tasmanian food specialist TasFoods (TFL) is looking to raise $4.1 million to support its new company strategy
- To raise the funds, TasFoods will undertake a placement and non-renounceable entitlement offer
- All up, TasFoods expects to issue up to 48.6 million new fully paid ordinary shares and raise over $4 million in capital
- Around $2.8 million from the equity raise will be used to increase TFL’s cash balance, $1 million will be used to revamp processing equipment and expand the company’s chicken sheds, and $250,000 is earmarked for new product development
- TasFoods shares will stay locked up until the company announces the outcome of the retail entitlement offer’s institutional phase
- Company stock last traded for 10.5 cents on August 24
Tasmanian food specialist TasFoods (TFL) is looking to raise $4.1 million to support its new company strategy.
Company shares were frozen earlier today as the consumer business prepared to announce the capital raise.
To raise the funds, TasFoods will undertake a placement and non-renounceable entitlement offer.
Through the placement, TasFoods will give institutional, professional and sophisticated investors the chance to buy stock at 8.5 cents per share in a bid to raise $650,000.
That share price represents a 10 per cent discount to the 30-day volume-weighted average price (VWAP) of TFL shares up to and including August 24. It’s also a 19 per cent discount to the stock’s last trading price on August 24.
Meanwhile, TasFood’s entitlement offer will provide eligible shareholders with the opportunity to subscribe for three new shares for every 20 they already own. The offer has two components; an accelerated entitlement phase, and a retail entitlement offer.
Significantly, two of TFL’s major stakeholders — CVC and Jan Cameron — have opted to take up their full entitlements during the offer.
All up, TasFoods expects to issue up to 48.6 million new fully paid ordinary shares and raise over $4 million.
Speaking to the decision to raise capital, TasFoods said it had faced challenging market conditions as COVID-19 caused food service businesses to shut up shop.
“Since then, the company has experienced board renewal and commenced a strategic review to ensure the business operations are positioned to grow in the changed economic environment in which it now operates,” the company stated.
At this stage, around $2.8 million from the equity raise will be used to increase TFL’s cash balance.
A further $1 million will be used to revamp processing equipment and expand the company’s chicken sheds.
$250,000 is earmarked for new product development, while the remaining $50,000 will cover the costs associated with the capital raise.
This month, KPMG is undertaking a Strategic Health Check across the TasFoods brand. The company expects to roll out its new strategy, supported by the fresh capital, once the review concludes at the end of August.
TasFoods shares will stay locked up until the company announces the outcome of the retail entitlement offer’s institutional phase.
Company stock last traded for 10.5 cents on August 24.
