Kathmandu to raise $200m in share offer
Kathmandu has moved to strengthen its finances to counter the impact of the Covid-19 virus.
The outdoors clothing retailer will raise $207 million through a sale of new shares, some of which will go to large investment funds, with the balance offered to existing shareholders.
Group chief executive Xavier Simonet said it wanted to take action quickly.
"The board is taking pre-emptive action with the capital raising announced today, to ensure our group remains strongly capitalised during the current market uncertainties."
He said the proceeds would be used to reduce debt and ensure it had plenty of cash and funding in the medium-term if the Covid-19 pandemic should be prolonged.
"Post-raising, the group will be strongly capitalised through the current market uncertainties caused by the global Covid-19 pandemic," Simonet said.
The company will issue nearly 414 million new shares at 50 cents each, which compared with a last traded price of $1.12.
Existing shareholders will be offered 1.2 shares for every one they currently hold, and any shares not taken up will be bought by a group of investment companies.
Last week the stock exchange eased its rules to make it easier for companies to raise money quickly to cope with any financial pressures caused by the virus
The company also released its half-year earnings, which saw its net profit fall 42 percent on last year to $8m, with revenue up 56.7 percent to just over $360m, due to strong sales across its Kathmandu, Oboz and Rip Curl Brands.
The profit fall was largely because of increased interest paid and costs associated with its purchase of Rip Curl surf wear business last year.
The company said Covid-19 had minimal impact on earnings in its half-year results, but there was uncertainty around the long-term effects on the business and operations and there would be a material adverse impact to full year earnings.
This article was originally published on RNZ and re-published with permission.
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