Smash repairer AMA Group says a fully underwritten share placement and institutional entitlement offer to raise $55 million has received strong support.
The new shares offered under the equity raising will be issued at a price of 7.5 cents each, which represents a 37.5% discount to last traded price of 12 cents on Wednesday August 30.
Funds raised will be used to repay $35 million of bank debt and provide liquidity and working capital.
AMA Group announced the equity raising last week after it reported a net loss of $144.4 million for the past financial year
The headline result included goodwill impairments for Capital Smart and the AMA Collison business. The company bought a 90% stake in Capital Smart from Suncorp in 2019.
Normalised earnings before interest, tax depreciation and amortisation (EBITDA), rose to $64.6 million from $21.6 million.
CEO Carl Bizon says the past 12 months have been a year of transition, but trading results for May to August provide confidence on financial guidance, and the benefit of actions taken on pricing, operational changes to improve the network and moves to alleviate labour shortages have begun to flow through.
AMA has forecast normalised EBITDA of $86-96 million for this year.
Mr Bizon, who will be stepping down at the November 23 annual general meeting, says “on-going price management” is required to ensure payment for work completed keeps pace with inflation.
“Whilst we led the market in achieving pricing increases with many of our insurance customers, many industry contracts still do not contain appropriate dynamic adjustment mechanisms to insulate parties from external pressures, such as inflation or increasing repair severity,” he says in the annual report.
AMA last month also announced that Chairman Anthony Day was retiring effective September 1 after nearly five years on the board, with Caroline Waldron stepping into the role.
The shares closed at six cents on Friday.