• Xavier Simonet
    Xavier Simonet
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Kathmandu Group has announced a $207 million equity raising plan in the wake of uncertainty surrounding COVID-19.

Responding to the current climate, Kathmandu is set to fortify its balance sheet with pre-emptive equity raising to cushion the impacts from a prolonged COVD-19 situation. 

The Group has launched a fully underwritten $207 million equity raising at an offer price of $0.50 per share via a $30 million placement to certain institutional investors, together with an approximately $177 million 1.2 for 1 pro-rata accelerated entitlement offer. 

Kathmandu Holdings’ Group CEO Xavier Simonet said that while the business experienced positive first half results, the Group needed to ensure it could weather the impacts of prolonged pandemic. 

"The Group’s first half financial results highlight the strength of our three global brands, Kathmandu, Rip Curl and Oboz.

"These results also show the strong position we would have been in to drive the next wave of our growth in line with our long-term diversification strategy had the global COVID-19 pandemic not occurred.

"In this situation of uncertainty and challenges, the health and wellbeing of our team and customers is paramount, while we maintain business continuity and ensure we are well positioned to bounce back quickly when more normal operating conditions return.

"The Board is taking pre-emptive action with the capital raising announced today, to ensure our Group remains strongly capitalised during the current market uncertainties.

"The proceeds of the equity raising will be used to deleverage the Group’s balance sheet and provide liquidity and funding in the medium-term should we experience a prolonged global COVID-19 pandemic," he said. 

The equity raising further strengthens the actions the business has already taken to combat COVID-19 including closing its stores and challenging all operating expenses. 

The use of the equity raising proceeds will go towards; paying down the existing Revolving Multi-Option Facility ($86 million); providing additional cash on balance sheet ($115 million); and, funding the transaction costs associated with the equity raising. 

Post equity raising, the Group will have total liquidity of NZ$315 million, with no debt maturities prior to November 2022; and will reduce net debt as at 31 January 2020 from 1.9x down to pro forma 0.5x.

The announcement of the equity raising follows a trading halt which was placed on Kathmandu ordinary shares on 31 March which will be lifted on April 02. 

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