RipCurl Owners Kathmandu announce massive capital raising

sneakerset's picture
sneakerset started the topic in Wednesday, 1 Apr 2020 at 9:55am

RipCurl owners just announced a massive capital raising of 1 new share for every for 2 at 50c (last traded 98c down from $3.00 per share on 3rd March!). They paid A$350M for RipCurl recently and the current value of the combined group (ie Kathmandu and RipCurl) pre -raising yesterday was $289M - now that's a big wipe out in value! Probably first of many cap in hand requests from companies across the retail space.

SYDNEY, April 1 AAP - Kathmandu Holdings will raise $NZ207 million ($A201 million) to
strengthen its balance sheet amid the coronavirus pandemic and a 40 per cent drop in
The New Zealand company will raise equity via a fully underwritten $NZ30 million
institutional placement and a 1.2 for one pro-rata accelerated non-renounceable
entitlement offer to raise $NZ177 million.
Kathmandu saw its first-half total net profit drop for 41.7 per cent to $NZ8.14
However, the Christchurch-based outdoor apparel and equipment company's sales jumped
by 58.8 per cent to $NZ363.7 million.
This followed the completion of its $A350 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
"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.
AAP GMC/JAC (Article credit: Gus McCubbing)

thermalben's picture
thermalben's picture
thermalben Wednesday, 1 Apr 2020 at 12:52pm

Saw the news yesterday but didn't realise the share price had dropped so much. 

Last 12 months have seen steady gains, and it reached a near-record peak of $3.54 on February 7th. The share price started to fall towards the end of the month, and just a few weeks later - on March 23rd - it bottomed out at 68c.

It's since rebounded to 98c (Mon) which is when they halted share trading.

thermalben's picture
thermalben's picture
thermalben Wednesday, 1 Apr 2020 at 12:56pm

"The new shares are being offered at NZ50¢ a share (A49¢) - half Kathmandu's closing share price on Monday and a fraction of the February high of $3.54."

billythekid's picture
billythekid's picture
billythekid Wednesday, 1 Apr 2020 at 1:53pm

Why is this on swellnet??? This is business crap. Yeah, they borrowed too much, took on risk by buying rip curl, now they need to screw over existing shareholders with a dilution so they dont go broke. What a great buy! Yawn.