Matrix forced into $36.7m raising | Source: The West Australian | May 23, 2012, 9:53 am
Matrix Composites & Engineering has been forced to launch a discounted $36.7 million capital raising to shore-up its balance sheet after a technical breach of its debt covenants.
The company, which specialises in manufactured products for the oil and gas and resources industries, announced today that it would seek to raise $25.9 million in an institutional placement priced at $2.10 and separately raise $10.8 million in a one-for-15 non-renounceable rights issue, also priced at $2.10.
Argonaut Capital will manage and underwrite the raising, with Matrix director Peter Hood to sub-underwrite 50,000 shares under the rights issue.
"The funds raised under the offer will be used to strengthen Matrix's balance sheet and provide for enhanced financial capability to pursue larger scale tendering opportunities, for the partial repayment of its debt facilities and to provide for additional working capital," Matrix said in a statement.
Shares in the company have been suspended for more than a week, after sliding to a near two-year low of $2.35.
In a separate financial and operational update today, Matrix said a non-cash write-off in the first half on its Malaga facility combined with the ramp-up of its new Henderson plant had resulted in a technical breach of its debt covenant.
However it said its financiers had agreed to waive the breach subject to a repayment of $8.5 million in borrowings and revised covenants.
The company has also foreshadowed a worse than expected full-year operating loss before tax of $20-$25 million on expected revenue of between $140-$150 million.
However Matrix forecast a return to profit in full-year 2013 of $23-$25 million on the back of expected revenue of $225 million.
The company said after the capital raising, it would hold $18 million in cash, have repaid a significant amount of debt, have a working capital surplus of about $50 million with a net debt/equity ration of 7 per cent.
The company said the raising would also give it enhanced financial capability to pursue larger tendering opportunities.
Matrix said it was still on track to achieve nameplate capacity for Henderson by the end of June and no further capital expenditure was required.
A one-time darling of investors, Matrix surprised the market in February when it posted a $2.4 million first-half loss, which it blamed on teething problems at its new Henderson plant and a surging Australian dollar.
Matrix shares last changed hands last week for $2.35.
