It isn't just Westpac Banking Corp (ASX: WBC) that has been raising capital this week.
This morning the MNF Group Ltd (ASX: MNF) share price will return from its trading halt after completing a capital raising of its own.
What did MNF announce?
On Friday the communications software specialist announced plans to raise approximately $50 million after costs at $5.00 per share. This is a 5.7% discount to the last close price.
This morning the company revealed that it has successfully completed an institutional placement to raise $52.1 million. The capital raising received significant support from net and existing investors.
According to the release, approximately 10.4 million new shares will be issued at $5.00 per share. Settlement is expected on November 11, with the new shares commencing trade on November 12.
These funds will be used to allow the company to pay down its bank debt, become net cash positive, and strengthen its balance sheet. This in turn is expected to allow MNF to accelerate its regional expansion strategy in the short to medium term.
Market update.
In addition to announcing the capital raising, MNF provided the market with an update on its performance during the first quarter.
CEO Rene Sugo said: "The business is performing well across all segments, with continued strong growth from domestic and global wholesale customers, driven by the take up of key products such as UCaaS and CPaaS. The first quarter has delivered to forecast expectations, and management are confident of meeting full year guidance."
That guidance is for EBITDA in the range of $33 million to $36 million in FY 2020. The mid-point of this guidance range represents growth of 27% on the $27.2 million of EBITDA it delivered in FY 2019.
On the bottom line, MNF is targeting earnings per share of 18.4 cents to 21.1 cents per share this year. This also represents annual growth of 27%, based on the mid-point of its range.
