Business Bakery sells down Trilogy holding as company raises $20 mln

Thursday 16th June 2016

Business Bakery will reduce its holding in Trilogy International, taking advantage of a 326 percent gain in the skincare and home fragrance company's shares in the past 12 months.

Trilogy's largest shareholder, whose owners include Trilogy chairman Geoff Ross, plans to raise $30 million by selling shares at $3.70 apiece, a 7.5 percent discount to their closing price yesterday. The sale would amount to 13.1 percent of the company, which plans to raise $25 million at the same price via a placement and share purchase plan.

Business Bakery, which currently owns 48.7 percent of Trilogy, would hold "at least 30 percent" following the capital raising and completion of the purchase of a quarter stake in Chilean rosehip producer Forestal Casino for US$8 million in cash and shares, Trilogy said in a statement.

"In response to strong demand for Trilogy International shares by investors who have noted a lack of liquidity, The Business Bakery has decided to realise a portion of its investment," the company said. The $20 million being raised by Trilogy would initially be used to repay debt, giving the company scope to speed up its long-term brand and market development, and fund acquisitions."

The capital raising would increase Trilogy's free float to about 70 percent of its stock, helping boost liquidity, it said.

Last month Trilogy reported that full-year profit more than doubled on soaring sales of its skincare and home fragrance products and the contribution from cosmetics and fragrance distributor CS Company. The shares closed at $4 yesterday having climbed from just 93 cents a year ago.

Trilogy funded the CS acquisition with bank debt and had drawn down on $34.8 million of its $55 million facility as at March 31. The company's finance costs rose to $1.8 million in the year from $391,000 in 2015.

UBS New Zealand is sole lead manager and underwriter for the capital raising, although the share purchase plan, to raise $5 million, isn't underwritten.

(BusinessDesk)

Maurice Greenough, Investment Advisor from Equity Investment Advisers Ltd comments, "Trilogy has been an excellent performer in recent times and we have rated this company well. The extra liquidity will be welcomed by investors and the stockbroking community alike".

BusinessDesk.co.nz

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