New Zealand Exchange-listed Metro Performance Glass Limited has reached a conditional deal with Cowes Bay Group, in which the Australian company will take a 13% stake and become its main lender.
Metro Glass is also pushing ahead with plans to raise capital. Photo / 123rf
Under that deal, Metro’s loan facilities will be extended to October 31, 2027, and the structure will be amended to provide Metro with an overall funding package that “allows both time and headroom for it to execute its medium-term strategies”, the company said.
Other terms under the facility, including sizing and pricing, remain materially unchanged.
The deal depends on CBG’s due diligence and the completion of final documentation, which is expected to take approximately four weeks.
“We are very pleased to be partnering with Cowes Bay. They are a strong strategic and financial supporter, and their input will greatly assist us in resetting our NZ business to return it to sustainable profitability and further grow our successful Australian business,” Metroglass executive director Simon Bennett said.
Capital raise
Metro Glass is also pushing ahead with plans to raise capital.
The board now expects to target raising $10m to $15m of capital from shareholders through a pro-rata issue soon after the completion of the transactions.
CBG has committed to taking up its pro-rata entitlement under the offer.
It also intends to subscribe for shortfall shares not taken up, provided that the subscription amount does not exceed 19.9% of its shareholding in Metro.
This is based on the expected terms of the offer, being a pro-rata offer at a subscription price of 3 cents per share.
Tough times
In May last year, the company said it planned to address the “material uncertainties” that “may cast significant doubt on the group’s ability to continue as a going concern”.
At the time, the company said it expected to formalise a capital raise offer or alternative options in the coming weeks and “this is expected to address the material uncertainty referred to in our annual accounts”, the directors said.
The board was refreshed in March, and chief executive Simon Mander resigned in early May and was replaced by director Bennett.