Reedy Lagoon has secured a fully underwritten $1.8 million placement that would more than double its shares on issue, while related-party debt is shifted to an interest-free 24-month repayment plan. The recapitalisation also brings a leadership change, with Geof Fethers retiring as managing director and Ish Peries joining the board.
- $1.8 million fully underwritten placement at $0.00125 per share
- New shares would represent 65% of the enlarged capital base
- Approximately $0.7 million of related-party debt to be repaid over 24 months
- Geof Fethers retires as managing director and remains company secretary
- Placement remains subject to shareholder approval and other conditions
$1.8 million placement would reshape Reedy Lagoon’s capital base
Reedy Lagoon Corporation Limited (ASX:RLC) is seeking shareholder approval for a $1.8 million fully underwritten placement that would transform its capital structure. The company plans to issue 1.44 billion shares at $0.00125 each, taking total shares on issue from 776.7 million to approximately 2.217 billion.
That means the new investors would own about 65% of the enlarged company if the placement completes, leaving existing shareholders with 35%. The funding is intended to strengthen RLC’s balance sheet and provide renewed capacity to advance its existing projects, although the announcement does not set out a detailed spending program.
Debt relief comes with a 24-month repayment plan
The recapitalisation is not limited to new equity. RLC says it will achieve a material reduction in existing liabilities, while approximately $0.7 million owed to Chromite Pty Ltd, a related entity of retiring managing director Geof Fethers, will be repaid in instalments over 24 months without interest.
The underwriter will receive a fee equal to 6% of the gross placement proceeds, as well as six five-year alignment options for every 1,000 placement shares issued. On the proposed volume, that equates to 8.64 million options exercisable at $0.004, in addition to the underwriting fee. RLC says no expenses are payable on top of that fee.
Fethers steps down as Peries joins the board
Fethers will retire as managing director effective 9 September but remain with RLC as a project adviser and company secretary, preserving continuity during the transition. Ish Peries has been appointed as a non-executive director, bringing more than 20 years of experience as a senior business banking manager at National Australia Bank, including work in financial markets, complex commercial lending, credit evaluation and debt structuring.
Chairman Jonathan Hamer and non-executive director Adrian Griffin will remain on the board. The placement still depends on shareholder approval under ASX Listing Rule 7.1, the appointment of new leadership and the required reduction in existing liabilities. Until those conditions are met, the promised stronger financial footing remains a proposed outcome rather than a completed one.
Bottom Line?
The funding could give RLC room to advance its projects, but shareholders must weigh that opportunity against 65% dilution and the conditions still attached to completion.
Questions in the middle?
- Will shareholders approve the placement despite the new shares representing 65% of the enlarged company?
- What specific project work will receive the $1.8 million of new funding?
- How much of RLC’s existing liabilities will be removed before completion, beyond the stated related-party repayment arrangement?