AFR:
Stockbroker Bell Potter Securities is lining up investors for cut-priced shares in skin and hair products company BWX Ltd. BWX Ltd’s working on an equity raising for this week. BWX is understood to have called in long-time adviser Bell Potter to oversee a raising slated for early this week, with proceeds used to shore up the company’s financial position ahead of its June 30 balance date.The mooted raising’s expected to be done at a hefty discount to BWX’s last traded price. Sources suggested shares could be sold for as little as 60¢, which would be a near 50 per cent discount.The rescue raising would be accompanied by a surprise profit downgrade, to be issued only 1½ months after BWX provided earnings guidance for the almost completed 2022 financial year and five weeks after an investor day. It would suggest trading dropped off materially in recent weeks.Bell Potter was understood to be putting indicative pricing and terms to potential anchor investors over the weekend.BWX could issue as many as 24 million shares under a placement structure without a shareholder vote. Such a deal could raise $15 million to $20 million, depending on the final price.A fire-sale raising would cap a horror stretch for the former market darling, which owns consumer brands including Sukin, Go-To and Andalou Naturals, and e-commerce platforms.The group’s earnings have been hit hard by rising freight and supply chain costs and underperformance of recent acquisitions, forcing the company to cut costs and consider divestments. Former CEO Dave Fenlon also left on March 1.BWX shares went into a trading halt on Friday ahead of the downgrade.BWX, which has a new manufacturing facility in Victoria, had nearly $85 million borrowings at December 31 and generated only $2.3 million operating cash flow in the preceding six-month period. Commonwealth Bank of Australia is its primary lender.The company most recently raised equity in August last year, picking up $85 million in a placement at $4.85 a share and another $10 million in a share purchase plane. Bell Potter and Macquarie Capital led the placement. Funds raised were used to acquire a 50.1 per cent controlling interest in Go-To Skincare.Bennelong Australian Equity Partners and Tattarang are its two biggest shareholders.
terrible result. potential 50% discounted placement @ around 60c. no retail participation expected
