News: CIE Contango Income Generator Seeks Trading Halt, page-2

Deal Summary:

Pricing:
Offer price of A$0.625 per Share (Offer Price)

- 4.6% discount to the last traded price on Friday, 7 August 2020 (A$0.655)
- 3.5% discount to the 5 day VWAP price (A$0.648)
- 14.9% discount to the pre-tax NTA (A$0.734 as at 31 July 2020) – 12.5% post Placement
- 16.4% discount to the post-tax NTA (A$0.748 as at 31 July 2020) – 14.1% post Placement

Transaction Overview:

The Company intends to raise up to a maximum of A$33.1 million by way of a combined Placement and Share Purchase Plan (“SPP”) of fully paid ordinary shares (“Securities”) at A$0.625 per share (combined, the “Capital Raising”). The Placement will raise gross proceeds of up to A$13.1 million and will be placed with institutions, Sophisticated and Professional investors who qualify under s.708(8) to (12). The Placement will be conducted using a single tranche structure in accordance with the Company’s available placement capacity pursuant to ASX Listing Rule 7.1 and the Temporary Extra Placement Capacity Waiver from ASX.

The Company’s SPP to existing holders will be announced at the same time as the Placement and will seek to raise up to a maximum of A$20.0 million (subject to the right of the Company to raise more or less) at the same A$0.625 per share Offer Price as the Placement.

The Capital Raising is expected to increase CIE’s funds under management (“FUM”) to over $100 million for deployment in the highly successful new WCM Quality Global Growth Long Short investment strategy.

Use of proceeds:
Funds raised via the Offer will be used to increase the Company’s FUM and will be deployed in accordance with the new WCM Quality Global Growth Long Short investment strategy to be implemented by the Company (refer to investment highlights for further details).

Investment Highlights:
- CIE proposes to adopt a new long short investment strategy to be managed by WCM Investment Management, LLC (WCM). WCM is a global growth equities manager based in Laguna Beach, California and manages the portfolio for ASX listed LIC WCM Global Growth Limited (WQG).
- WCM has a long-term track record of outstanding investment performance across multiple strategies and manage in excess of A$85 billion (as at 30 June 2020) of assets on behalf of institutional and retail investors around the world, including Australia.
- CIE proposes to adopt the WCM Quality Global Growth Long Short Strategy, which since inception on 30 June 2014, generated a return of 23.5% per annum, outperforming its benchmark, the MSCI All Country World Index by an annualised 11.6% per annum.
- CIE believes the increased scale and liquidity as a result of the Capital Raising and the proposed appointment of WCM should reduce the Company’s current 14.9% discount to pre tax NTA (12.5% post Placement).
- A meeting of shareholders will be held on 18 September 2020 to approve the change for CIE.

Bids Due: 5:00pm, Tuesday, 11 August 2020