AFT Pharmaceuticals is raising capital to reduce debt, increase liquidity and possibly pay a dividend in the next financial year.
File photo. Photo: 123RF
The Maxigesic manufacturer was planning to raise a total of $12 million through an issue of new shares, while two of the business's largest shareholders, AF Trust and CRG, were selling down their stakes.
A $10m offer of new shares to institutional investors was fully underwritten at a floor price of $3.65, which was a 22.3 percent discount to the last traded price, with the final price to be determined through a bookbuild.
Another $2m of shares was being offered to small retail investors.
The Atkinson founders investment vehicle, AF Trust, will sell about $3.5m of shares, while CRG, which had been a shareholder for the past six years, was selling its entire holding of 16 million shares.
Founder and managing director Dr. Hartley Atkinson said the fresh capital would reduce net debt and potentially position the company to pay a dividend to shareholders in the 2022 financial year.
"So as long as things progress as we forecast and as we plan, then literally next year we would be looking seriously at the option of whether we can pay a dividend or not," he said.
In addition, he said the sale of existing shares would increase share trading liquidity.
"Advice we had from experts in the area is the best approach really was for everything to happen at once," Hartley said.
"CRG were always planning at some stage to sell down because their fund was closing, so because they were doing that, then at the same time we looked to do a small capital raise."
Hartley also confirmed AFT was on track to meet its 2021 financial year underlying profit guidance of $14m.