Estia Health Ltd. completed a strategic and operational review, unveiling a plan to undertake an underwritten entitlement offer to raise A$136.8 million and to replace its chairman.
Following the review, the company decided that in order to reduce its core debt over the medium term, it will launch the entitlement offer and forgo paying an interim dividend in March 2017. Estia dividend policy will be to pay at least 70% of net profit after tax for the period the dividend relates.
Estia will undertake an underwritten 1-for-3 accelerated nonrenounceable entitlement offer for A$2.10 per new share, a discount of 21.6% to the shares' closing price on Dec. 9. The rights will not be traded on the Australian Securities Exchange or be transferable.
Macquarie Capital (Australia) Ltd. is acting as the lead manager and underwriter for the offering.
The aged care company said the move will reduce its core debt to A$85.5 million and net debt to A$143.0 million. Estia has faced criticism in the Australian press regarding its debt levels.
Additionally, director Gary Weiss will replace Pat Grier as chairman when Grier steps down from the role Dec. 31. Grier will continue to serve as a nonexecutive director and said in a news release that he believes it is the right time for the company to make a transition in the chairman role.
The company reconfirmed its guidance for the fiscal 2017 full year, with EBITDA expected to be in the range of A$86 million to A$90 million based on year-to-date results and performance.
Further, the company instituted a number of operational initiatives following the strategic review, including replacing its existing operation matrix structure with a regional structure and creating a head of quality role.
As of Dec. 9, US$1 was equivalent to A$1.34.