Kathmandu announces capital-raising
Kathmandu Holdings will raise NZ$207 million (A$201 million) to strengthen its balance sheet amid the coronavirus pandemic and a 40 per cent drop in profit.
The New Zealand company will raise equity via a fully underwritten NZ$30 million institutional placement and a 1.2 for one pro-rata accelerated non-renounceable entitlement offer to raise NZ$177 million.
Kathmandu saw its first-half total net profit drop for 41.7 per cent to NZ$8.14 million.
However, the Christchurch-based outdoor apparel and equipment company’s sales jumped by 58.8 per cent to NZ$363.7 million.
This followed the completion of its A$350 million purchase of surf brand Rip Curl, which enjoyed a first-half sales jump of 3.7 per cent.
Kathmandu chief executive Xavier Simonet said the company’s first-half results demonstrated the strong position it would have been in “had the COVID-19 pandemic not occurred”.
“The board is taking pre-emptive action with the capital raising … to ensure our group remains strongly capitalised during the current market uncertainties,” he told the ASX on Wednesday.
“The proceeds of the equity raising will be used to deleverage the group’s balance sheet and provide liquidity and funding in the medium term should we experience a prolonged global COVID-19 pandemic.”
Kathmandu was forced to shut down stores and stand down more than 2000 staff across Australia and New Zealand because of increasing coronavirus restrictions.
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