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Source: ONE News
Insurance and financial services company Tower says it is looking to raise $81.3 million through a pro-rata renouncable rights issue to existing shareholders.
The company on Monday emerged from a trading halt with news of a fully underwritten offer that will give existing shareholders the opportunity to buy five new shares for every 16 shares held.
Tower says Guiness Peat Group Plc, which indirectly holds 34.9% of the company's issued shares, has indicated it will take up the offer.
Tower group management director Rob Flannagan says the funds raised will support the company's growth strategies and give it the flexibility to take up strategic opportunities should they arise.
Market analyst Anne Hare says the announcement came as a bit of a surprise.
"We had expected that things were going smoothly for the company, they had said that halfway during the year when they had their full announcement around March," she says.
However, Flannagan says Tower's fundamentals are sound and satisfactory results have continued.
"Assuming normal and stable trading conditions for the remainder of the financial year, the board expects the full-year underlying profit to be in line with market expectations," he says.
The rights issue is being underwritten by Goldman Sachs JB Were.
