| Shareholders
of automotive components maker CMI Limited, at today’s General
Meeting approved all resolutions as tabled, enabling the company to
proceed with plans to raise approximately $11 million through an entitlement
issue of 7,587,250 new convertible preference shares.
A prospectus for the entitlement issue, which is fully underwritten
by ABN AMRO Morgans Corporate Limited, is expected to be mailed to shareholders
on 24 April.
As a result, both CMI’s ordinary shareholders and convertible
preference shareholders registered on 24 April will be entitled to one
new convertible preference share for every six ordinary or convertible
preference shares held.
The new convertible preference shares are being offered to shareholders
at $1.45 each. This compares to the market price of CMI’s convertible
preference shares which have been have been trading at around $1.70
on ASX.
CMI said the capital raising had been deliberately structured to provide
its predominantly private shareholder base with a regular, high yield
income stream. Fully franked dividends are payable in four quarterly
installments and over the first three years are forecast as follows:
- 12 mths ended 21
May 2004 – 13.0625 cents (9.00%*)
- 12 mths ended 21
May 2005 – 13.8125 cents (9.53%*)
- 12 mths ended 21
May 2006 – 14.0000 cents (9.66%*)
*Running yield at issue price
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Dividends
paid after 21 May 2006 through to maturity are forecast to be not less
than 14 cents per annum. On 21 August 2011, the convertible preference
shares will be converted into ordinary shares at the option of the holders
of convertible preference shares or CMI.
Mr Hofmeister said today that the funds raised from the entitlement
issue would be used to reduce bank borrowings associated with the company’s
recent acquisitions of Toowoomba Metal Technologies and the automotive
business of National Forge and to accelerate expansion both in Australia
and the US.
Mr Hofmeister said both acquisitions would make a meaningful contribution
to CMI’s earnings in the half year ending 30 June 2003, and would
add around $60 million to the company’s revenue base on an annualised
basis.
“Based on the impact of the two acquisitions and the continuing
strength of Australia’s car manufacturing sector, we’re
confident of achieving double digit earnings growth for the full financial
year,” he said.
CMI, which has racked up a number of extensions to its existing domestic
supply arrangements with car markers such as Holden and Ford over the
past year, booked a 21% lift in net profit after tax to $2.5 million
for the six months 31 December 2002.
Further Information
Please Contact:
Max Hofmeister
CMI Limited
Ph: 07 3004 8188
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