Dec 2008 Financial News

Global crisis hits Agostini’s rights issue

Dec 10, 2008

Agostini’s Ltd has suffered a shortfall in its rights issue which closed on October 22, 2008.

In a notice published in Monday’s newspaper, the company said the issue was affected by the global financial crisis and said it would cancel the unsubscribed shares. The company said there was a shortfall of 8,783,406 shares which were to be taken up by the underwriters.

“Simultaneously, we were approached by investors who indicated in writing that they would take up the shortfall within a few days. Unfortunately, these investors did not come through in the required timeframe.

“In accordance with the company’s agreement with the underwriters to the issue, and to avoid further shares being offered on the market, which may have a significant adverse effect on the pricing, we will be cancelling the unsubscribed shares,” the notice read.

The rights issue was made to cover the cost of Agostini’s purchase of Hand Arnold in August for $125 million. Agostini’s had an arrangement to finance the acquisition and the proceeds of the rights issue was to be used to pay off the facility. Because of the undersubscription of the issue, Agostini’s has been left with a balance of some $83 million. The company is considering options for raising the additional money. In the end a total of 2,028,236 shares were allocated, bringing the total number of shares in issue in Agostini’s to 29,057,341.

“The company has facilities with its bankers to fund the rights issue shortfall, but the board of directors is in the process of examining other financial options and would advise in due course, should any major re-financing be considered appropriate,” the notice ended.


Source:
The Trinidad Guardian
Wednesday December 10, 2008
http://www.guardian.co.tt/business1.html