AFG completes institutional piece of equity raise

AFG said earlier this week that it was conducting a $60-million equity raise in order to strengthen its capital position amid the economic impacts of the coronavirus pandemic.

It also sought to support future growth of AFG Securities and other ongoing growth initiatives.

In its latest update to the ASX, AFG announced the completion of its fully underwritten placement to institutional and sophisticated investors and the institutional component of its one for 5.5 pro-rata accelerated non-renounceable entitlement offer of fully paid ordinary shares in the company.

It was done at an offer price of $1.15 per new share.

Around $46.9 million was raised across the placement and the institutional component of the entitlement offer.

According to AFG, the placement received strong demand from both existing shareholders and new institutional investors. The institutional entitlement offer had a take-up rate by eligible institutional shareholders of around 92 per cent. This excluded AFG directors.

AFG CEO David Bailey said the aggregator was pleased with the support received from existing shareholders and new institutional investors for the offer.

“This represents a clear endorsement of AFG’s long-term vision and efforts to maintain business momentum during this period of market disruption,” he said.

“The offer will serve to further strengthen our capital position, support future growth of AFG Securities and allow the company to continue to deliver its long-term multi-tiered approach for growth.”

Certain AFG directors and management have committed to subscribe for around $5 million of the entitlement offer and sub-underwrite up to $0.7 million of the retail entitlement offer.

The retail portion of the entitlement offer, which is fully underwritten, is expected to raise another $13.1 million. It is expected to open on 20 May and close on 2 June.

Approximately 40.8 million new shares subscribed for under the placement and institutional entitlement offer are expected to be settled on 22 May, and to be issued and commence trading on the ASX on 25 May.

New shares issued under the placement will not be entitled to participate in the entitlement offer.

The company’s ordinary shares were expected to resume trading on the ASX on an ex-entitlement basis from market open on Thursday, 14 May.

[Related: AFG-Connective merger decision expected next month]