Assetora Limited has announced a $4 million pro-rata rights issue priced at $0.16 per share, with half the offer underwritten by existing shareholders to strengthen its balance sheet and repay debt.
- Pro-rata non-renounceable rights issue to raise up to $4 million
- Shares priced at $0.16 each, representing a discount to assessed fair value
- $2 million of the offer underwritten by existing shareholders
- Funds aimed at debt repayment and working capital support
- No underwriting or capital raising fees payable
Assetora’s Capital Raise Strategy
Assetora Limited (ASX – AOH) has unveiled plans for a pro-rata non-renounceable rights issue designed to raise up to $4 million. The offer, priced at $0.16 per share, will allow eligible shareholders to subscribe for one new share for every ten shares they currently hold. Notably, $2 million of this capital raise is underwritten by existing shareholders miHubb Ventures Pty Ltd ATF Karakoram Trust and ANCA Capital Pty Ltd, signalling strong insider confidence.
Pricing and Market Context
The issue price reflects a considered balance by the board, taking into account the company’s recent suspension from trading and the absence of a reliable market price. It represents a modest premium to the company’s last capital raising price of $0.14 per share in 2025, while still offering a discount to the board’s assessed fair value of approximately $0.20 per share. This pricing approach aims to incentivise shareholder participation while acknowledging the company’s improved financial position and reduced risk profile.
Use of Funds and Financial Implications
The proceeds from the rights issue will be directed towards strengthening Assetora’s balance sheet, including repayment of fixed debt and bolstering general working capital. This move comes as part of the company’s broader efforts to stabilise its financial footing following a period of restructuring and legacy debt resolution. Importantly, the rights issue is not conditional on the company’s reinstatement to ASX quotation, underscoring a commitment to progress irrespective of market trading status.
Shareholder and Market Considerations
Existing shareholders backing the underwriting have agreed to terms without any fees for underwriting, management, or capital raising, which is unusual and may be viewed positively by the market. The non-renounceable nature of the offer means shareholders cannot trade their rights, encouraging direct participation. The timetable anticipates the prospectus lodgement with ASIC and ASX within four weeks, with the offer expected to open shortly thereafter.
Looking Ahead
While the rights issue provides a clear path to financial consolidation, the company’s trading suspension remains a cloud over immediate market activity. The success of this capital raise will be a key indicator of shareholder confidence and could set the tone for Assetora’s next phase of growth and market re-entry.
Bottom Line?
Assetora’s rights issue marks a pivotal step in its financial recovery, but market watchers will keenly await shareholder uptake and trading reinstatement.
Questions in the middle?
- What level of shareholder participation will Assetora achieve in the rights issue?
- How will the company’s trading suspension impact investor sentiment post-raise?
- What are the next strategic moves following the balance sheet strengthening?