Capital Raising, page-114

Retail investors take up most of Cardno capital raising stock on offer

Liam Walsh, The Courier-Mail
June 22, 2016 6:54pm
Subscriber exclusive

CARDNO has managed to encourage a large chunk of everyday investors to stump up more cash despite a bloody bottom line for the Brisbane-based infrastructure consultancy.
It comes as two top positions at the company are being made redundant only seven months after executives were confirmed in the roles.
Cardno was attempting to raise $67 million from existing retail investors. Those investors applied for 127 million of them worth $50.8 million, or about 75 per cent, according to a stockmarket notice issued on Wednesday. The excess stock was picked up in an underwriting agreement.
The support perhaps reflected a rock-bottom price of 40c a share — Cardno stock went as high as $8.64 in August 2012, and closed at 55c on Wednesday.
Burrell Stockbroking analyst Bruce McLeary also pointed out 45 per cent shareholder Crescent Capital had last year launched a takeover attempt and given recent takeover activity in the mining-industrial sector, Cardno “likely remains in the cross-hairs”. But he added investors would “need patience if this is their strategy as these types of plays can take time to play out”.
Cardno, a 6400-employee business whose projects have include work on Brisbane’s Legacy Way toll road, had been a stockmarket darling with almost 50 acquisitions since 2004 helping fuel profits. But poor markets and problems integrating acquisitions have been partly blamed for Cardno spiralling to losses. It forecasts a $177 million loss this year.
Cardno’s 75 per cent take-up rate is on the mid-to-higher end of such offers. Figures from Burrell Stockbroking show laboratory business ALS recorded a 43 per cent rate in a similar offer last December, while financier Flexigroup had a 95 per cent rate.
Cardno’s latest move raised $93 million, including from big investors. It came only six months after Cardno asked investors to chip in $78 million at $1 a share. This month’s move was to reduce debt and avoid breaching bank covenants.
The company also confirmed the positions of general manager for Asia Pacific and GM for the Americas are being made redundant from July in a company reorganisation. Asia Pacific chief Paul Gardiner, an 18-year employee who helped win contracts including work on Queensland’s Lady Cilento Children’s Hospital, is understood to be leaving the business.
Mr Gardiner and Americas GM Mark Swatek were only officially confirmed in the role in December last year.