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TFS Raises $60million via Institutional Share Placement

TFS Raises $60million via Institutional Share Placement
The proceeds from the placement will be used to fund the acquisition of around 221 hectares of MIS Grower Interests, in five MIS Projects, expecting to amount to a maximum cost of $53million.
Apr 04, 2016 By Ben Khouri Tags: TFC

Indian Sandalwood suppliers TFS Corporation (ASX:TFC) have successfully implemented an institutional share placement, raising $60.45million. The placement received overwhelming demand from both existing and new institutional shareholders.

Under the placement, TFS will issue approximately 39 million new ordinary shares at an 8% discount of $1.55 per share, based on TFS closing price of $1.685 on the 30th of March 2016.

Moreover, the proceeds from the placement will be used to fund the acquisition of around 221 hectares of MIS Grower Interests, in five MIS Projects, expecting to amount to a maximum cost of $53million.

Under this buyback, TFS expects to increase their direct ownership of plantation assets to around 3,768 hectares. TFS plans to launch this buy-back by making offers to growers within the TFS scheme in April 2016, with the price being based on the book value of the plantations, as at the 31st of December 2015.

Managing Director Frank Wilson was quite pleased with the placement: “We are delighted with the strong support received from both existing and new shareholders for this institutional placement. Consistent with our strategy of increasing TFS’s ownership of Indian Sandalwood plantations, we will deploy the new capital by making offers to acquire the interests of growers in schemes due to be harvested in the next five years. The successful completion of this Buy-Back programme is expected to provide TFS with very attractive financial returns.”

Canaccord Genuity (Australia) Limited and Moelis Australia Advisory Pty Ltd acted as joint lead managers and joint book-runners to the placement.

Share Purchase Plan

Additionally, TFS will also make an offer to participate in a Share Purchase Plan, with eligible shareholders entitled to acquire up to $15,000 of new TFS shares.

The company aims to raise $5million through the SPP. The offer price under the SPP will be the same 8% discount under the institutional placement, at $1.55 per share.

The SPP will be open to eligible Australian and New Zealand resident shareholders on the register at 7.00pm AEST Friday 1st April 2016.

As at 10.27am (AEDT), TFC is down almost 2.7%, to $1.64.

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Ben Khouri Author: Ben Khouri Apr 04, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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