PG raises funds for recapitalisation

Published: 25 February 2014

PG Industries is looking to bring on board strategic partners to enhance the group's capital position and complement the initiatives being made to restructure creditor balances.

In a circular to shareholders, PG said it would raise $3,5 million through private placement, property sale and term loans from various financial institutions.

PG said Old Mutual has agreed to inject $1 million new equity capital in the group through a private placement.

Under the private placement, PG will place approximately 1 000 000 000 new ordinary shares with Old Mutual Life Life Assurance at an offer price of $0,001.

"The private placement shares are subject to claw back from PGIZ shareholders who would wish to reduce the impact of dilution resulting from the private placement," PG said.

The group said it had also secured a $1,1 million term loan from BancABC as well as buyers for its properties for a combined $960 000. The company is also negotiating with various banks for an additional $440 000.

"The company intends to use the funds raised in the capital raised predominantly to strengthen its working capital position by purchasing additional stock," PG said.

The company's shareholders will meet next month to consider these and other initiatives a designed to reverse the negative equity position and recapitalize the business.

The company's balance sheet is currently characterized by $5,3 million worth of bank loans, $18,7 milion worth of creditors, $6,72 million worth of debentures and a negative equity of $3,3 million.

The company will seek shareholder approval of a scheme of arrangements with members, secured lenders, holders of debentures, unsecured creditors as well as super group trading.

The scheme will include converting $6,72 million worth of debentures to PG ordinary shares at a conversion price of $0,001 based on a 60 day volume weighted average price of PG ordinary shares as at December 30 2013.
- BH24

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