AFR: Webjet launches equity recap at $1.70 a share Hope for us...

AFR: Webjet launches equity recap at $1.70 a share

Hope for us FLT holders?

Webjet is pitching a $275 million-plus equity recapitalisation to shareholders at $1.70 a share.The company's brokers Goldman Sachs, Credit Suisse and Ord Minnett launched the deal at lunchtime on Wednesday after nearly two weeks of talks with potential investors. The three brokers were named as underwriters.Funds raised will be used to put the company in a $140 million-plus net cash position, according to a presentation in front of investors.The raising was split into a $101 million underwritten placement and rights issue worth at least $174 million.The deal was at $1.70 a share, which was a 32.2 per cent discount to the theoretical ex-rights price and a 53.7 per cent discount to the dividend adjusted last close, according to terms sent to funds.The rights issue was structured as a one-for-one non-renounceable deal and only partially underwritten. If all shareholders take up their rights, the company would raise $231 million.

Street Talk understands the company agreed final terms with investors and its underwriters on Wednesday morning. The underwriting agreement was provided to potential investors.Webjet chairman Roger Sharp. Fairfax MediaThe deal makes use of temporary relief to ASX Listing Rules that were finalised on Tuesday. Webjet is seeking to place shares worth about 20 per cent of its total shareholder base, adjusted for the one-for-one rights issue.The previous cap was 15 per cent.The offer sees Webjet end any notion of a bailout package from private equity. It had been talking to KKR, among others, about a convertible note and direct equity stake.It was also accompanied by news Webjet would defer its $12.2 million interim dividend and dramatically reconfigure its workforce, capital expenditure and other spending.The mooted deal caps Webjet's on-again off-again talks with listed equity investors and private equity players. The company and its bankers at Goldman Sachs, Credit Suisse and Ord Minnett put a $250 million equity recap to investors early last week, which failed to secure adequate support.Funds were told the deal fell over when Webjet was unable to secure underwriting (and sub-underwriting) for the large retail portion of the rights issue.The company's shares last traded at $3.76 on March 18.