Lindsay Australia Limited (ASX: LAU) has emerged from a trading halt this morning upon the successful completion of a private placement of shares, while it has also announced an opportunistic share purchase plan (SPP) for eligible shareholders.
Lindsay Australia, whose major shareholders include Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Orora Ltd (ASX: ORA), is a transport and logistics group with a particular focus on the food industry, and has one of Australia's largest refrigerated transport fleets. With its operations panning Australia's east coast up to far-north Queensland, the company is also in a fantastic position to benefit from the growing demand for Australian seafood from Asia.
The company announced that it has successfully completed a placement of almost 28.9 million shares to sophisticated or professional investors at an issue price of 45 cents per share, raising just over $13 million. It said that eligible shareholders would be given the opportunity to purchase up to $15,000 worth of stock at the same price, which represents a 10% discount to the stock's closing price on 3 June.
Should you participate?
Strategically, the capital raising makes sense as the funds raised by Lindsay Australia will be used to provide working capital to upgrade the logistics system; fund the construction of a new depot located in Acacia Ridge (Queensland), and to assist with future acquisitions.
At the same time however, investors could be given the opportunity to buy shares at an even cheaper price than that proposed in the SPP presentation. While shares are being offered at 45 cents in the plan (with no brokerage or transaction fees), the stock has actually fallen 8% this morning to trade at just 46 cents, which could be a reflection of investors' distaste at the amount their ownership stakes will be diluted as a result of the raising.
As such, investors may want to hold off from making a decision on the SPP just yet. They will have until 5:00pm on 30 June 2015 (Sydney time) to decide.
