Rothschild tasked with solving LatAm Autos’ woes

I doubt this one will come out of suspension without a deal..

Rothschild tasked with solving LatAm Autos’ woes

• The Australian
• 12:00AM February 6, 2017
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• BRIDGET CARTER
  
  Mergers & Acquisitions Editor
  Sydney
  @BridgetCarterb
  
  SCOTT MURDOCH
  
  Journalist
  Sydney
  @murdochsj
  

Online car retailer LatAm Autos suffered the ignominy last week of missing its capital raising target of just $12.5 million but there could be help on the way.
The flop was made even more embarrassing given the company was co-founded by investment bankers Gareth Bannan, formerly of KPMG’s corporate finance practice, and Tim Handley who was an M&A adviser at Gresham and UBS.
It seems the pair, reportedly based in Ecuador, have put their pride aside and called in Rothschild to come up with a solution for the company’s future.
Many in the market were not surprised that the capital raising, led by Bell Potter at 16c a share, failed to get off the ground given the structure of the deal.
The company was trying to raise $12.5m to $18.5m, a big ask given its market capitalisation sits at just $50m so raising more than one-third of its valuation was going to be tough.
Under the raising, new and existing investors who subscribed were given two-thirds of their new stock now and received the rest after a shareholder vote, which meant they were exposed to the share price moves in the interim. The shares were also offered with no discount, which is hardly alluring for a struggling company the market doesn’t quite understand, given its geographic focus in central and South America.
LatAm Auto shares were suspended from trading on the ASX on Thursday and the board is expected to provide an update shortly that it has called in Rothschild to work its magic and resuscitate the flagging company.
A number of suitors have reportedly been circling LatAm so it makes sense that Rothschild would be keen to nail down a potential buyer.