Tue | Jul 17, 2018

Eppley to raise $317m from rights issue

Published:Wednesday | May 4, 2016 | 12:00 AM

Eppley Limited, a member of the Musson Group, will seek to raise some $317 million in its rights issue for shareholders this month.

It will be Eppley's third fundraising effort through the stock market, not counting its initial public offering via the junior exchange.

The company previously did two preference share issues.

"We are in a business that invests in [insurance premium finance] receivables, and when we make money, we pay out to shareholders ... and so we are asking shareholders to invest more money with us, and that's why we are offering the rights issue," said Eppley Managing Director Nicholas Scott on Monday.

At the end of 2015, Eppley's investment portfolio was valued at $1.37 billion, while gross income yield on its portfolio stood at 14 per cent.

Eppley's profit after tax in 2015 was $56.5 million or 10.4 per cent over 2014. It also operates with a return on equity of 19 per cent. Last month, the company voted to increase its authorised share capital at an extraordinary general meeting as a precursor to its rights issue.

The company will issue a circular to shareholders with information about the offer.

The rights issue follows a vote by shareholders to increase the company's authorised capital. Eppley will offer up to 487,703 new shares priced at $650 each to ordinary stockholders on record as at May 6.

Eppley's ordinary stock closed at $650 on Tuesday, its highest price to date, spiking from $580.76 on Monday. The company has 796,249 shares in issue.