destra Corporation today announced it will raise $15m in new capital via an underwritten rights offering. The rights issue will be a 5-for-11 non-renounceable offering at 10.0 cents and is fully underwritten by major shareholder Prime Media.
In conjunction with the right issue, Destra will also issue a $3.5m convertible bond to Prime Media that will carry a coupon of 11.0%, have a maturity of 12 months (which Prime Media can extend by a further 12 months) and be convertible into destra shares at 10.0 cents at any time. The bond is also repayable out of the rights issue proceeds at Prime Media’s election.
In addition, destra has also entered into a conditional agreement for the sale of its Eagle Farm land and buildings in Brisbane for approximately $19.0m. Subject to satisfaction of certain due diligence conditions and customary closing conditions, sale is expected to complete by the end of May.
The new capital and proceeds of the property sale will be used to strengthen destra’s balance sheet, retire short term and reduce senior debt and provide the company with additional working capital for building its business.
destra CEO, Domenic Carosa said, “This capital raising allows destra to strengthen its balance sheet to a more appropriate level in the current environment and to continue to focus on integrating its businesses.”
Warwick Syphers, Prime Media Managing Director and CEO, said “The level of Prime’s participation via the underwritten rights issue and convertible placement reflects our commitment and belief in the ongoing prospects of destra and the broader digital media industry.”
A letter will be sent to destra shareholders shortly providing details of the rights offering and providing them the opportunity to participate on a pro rata basis.
Gresham Partners is advising destra on the rights issue.