Gale Pacific Chairman's address to general meeting
27 Aug '07
4 min read
GALE PACIFIC LIMITED Chairman's address to the extraordinary general meeting. Before we proceed with the business of the meeting, I would like to provide shareholders with a briefing on the effect of the proposals we will be voting on later in the meeting.
As you are all aware, your Directors are proposing a significant recapitalisation of the Company combining a $20.0 million equity placement and new long term banking facilities.
The proposed equity placement involves the issue of 40.0 million shares at a price of $0.50 per share. Investec Wentworth Private Equity and its related entities (“IWPE”) will acquire 30.3 million placement shares and will appoint one representative to the Board of the Company. Thorney Holdings Pty Limited, presently the largest shareholder in Gale Pacific, will acquire the remaining 9.7 million shares.
Following completion of the placement, Investec will hold 22.1% of the Company's shares on issue and Thorney will hold 19.9%. The Directors believe that the proposed involvement by IWPE in the Company will bring a number of significant benefits.
IWPE is part of the Investec Group, a specialist banking group which manages more than $130 billion of assets globally and has a successful track record of investing in both private and public companies through an active investment approach.
We believe the combination of the capital being invested, and the experience and resources of the wider Investec Group will assist the Company in achieving its plans for profitable growth.
We are also extremely pleased to have the continued support of Thorney, who as I mentioned previously, will remain one of the Company's largest and longest standing shareholders. In addition, we would like to acknowledge the continued support of the Company's current banker, the Commonwealth Bank of Australia.
As previously announced, subject to the approval by shareholders of the proposals before the meeting, the CBA has agreed to provide ongoing funding for the business. The agreed facilities will provide the Company with a long term banking solution at competitive rates, and flexibility to fund the Company's growth aspirations.
Net proceeds from the placement will be used to address the Company's current financial requirements, refinance its existing banking facilities, provide the expansion capital necessary to restructure the Company's New Zealand manufacturing operations, support growth in the Company's USA and European markets, and provide funds for product development.
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