McAleese to de-list, raise $26m capital in rescue bid


The restructure deal will see the company sell its Cootes business and dilute existing shareholders

McAleese to de-list, raise $26m capital in rescue bid
McAleese will seek ASX approval to de-list, but will be required to consider re-listing in two years’ time as part of the agreement.

 

McAleese Group has struck a recapitalisation deal with its existing financiers and a consortium led by Hong Kong-based SC Lowy following months of uncertainty.

The company has resumed share trading as of today at 4.2 cents after entering voluntary suspension in March.

The terms of the binding heads of agreement include de-listing from the Australian Stock Exchange (ASX), requiring McAleese to raise $26 million from shareholders via an issue of subordinated convertible notes, and the sale of its Cootes Transport business.

The firm’s $196 million senior debt will be cut down to $112.3 million as part of the restructure deal that will see:

  • the SC Lowy consortium paying out and refinancing $91.3 million;
  • the company repaying $16 million from cash on its balance sheet and drawings under a new working capital facility for up to $25 million;
  • $5 million to be paid by the company from the proceeds from the Cootes sale.

The senior debt acquired by the consortium will be replaced by a new senior debt facility totalling $91.3 million plus fees and interest accrued from the time of the senior debt acquisition.

McAleese will issue to the consortium options over its ordinary shares with a zero strike price such that the consortium will hold 35 per cent of McAleese’s shares on issue post-exercise of the options and post-recapitalisation.

The company will undertake a $26 million entitlement offer of secured convertible notes to its shareholders, with their stake reduced from around 70 per cent to anything between zero to 42 per cent, excluding the firm’s major shareholder and current MD Mark Rowsthorn.

The debt deal requires Rowsthorn to underwrite the note issue in exchange for a five per cent stake in the company.

The company will seek ASX approval to de-list, but will be required to consider re-listing in two years’ time as part of the agreement.

McAleese chairman Don Telford says the announcement is the "result of an extensive process, conducted over several months with the forbearance of our bank group.

"While the outcome is a disappointing one for existing providers of both debt and equity, we are pleased that shareholders will have the opportunity to consider, and participate in, the recapitalisation."

The deal is subject to approval by existing shareholders through a vote in August.

"Over the last twelve months extensive restructuring across the Group has reduced cost to better align the portfolio to current demand and ensure that each business is well placed to benefit from a recovery in market conditions," a company statement reads.

"This restructuring has occurred with the Group under financial pressure and intense scrutiny from a range of stakeholders and external parties.

"The financial restructure separately announced today is expected to relieve some of the pressure on the company’s businesses, contributing to improved market share and financial performance."

McAleese shares last traded at 5.8 cents.

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