Tempered demand for Stobart £20m open share offer
THE UK’s Stobart Group, which owns Dublin-based Stobart Air, saw shareholders take up just 56pc of the shares that were part of an open offer to investors as part of a plan to raise £100m (€110m) to shore up its balance sheet.
The open offer element of the fundraising saw 50 million shares offered to existing shareholders at 40p each. That means that those existing shareholders bought just £11.3m of the £20m of shares on offer to them.
The remaining shares have now been allocated to investors with whom the 50 million shares had been conditionally placed pending the outcome of the open offer.
Some of the proceeds from the fundraising are due to be injected into Stobart Air, which operates the Aer Lingus Regional service.
Earlier this month, Stobart Group, whose chief executive is Warwick Brady, said it intended to raise between £80m and £100m via a firm placing and open offer.
About 80pc of the proceeds were due to be raised via the firm placing, with certain institutions having agreed to subscribe to just over 200 million shares at 40p each. Those firm-placed shares would represent just over 32pc of the company’s issued share capital immediately after the shares were admitted to trading.
Stobart’s joint bookrunners also conditionally placed almost 50 million shares at 40p each, subject to clawback to satisfy applications by qualifying shareholders taking part in the open offer.
That open offer allowed shareholders to buy two discounted shares for every 15 shares they already owned. The shares were being offered at a 42.2pc discount.
But Stobart confirmed yesterday that just 28.1m shares were accepted or applied for under the open offer, representing 56.4pc of the shares that had been offered for sale to existing shareholders.
The remaining 21.7m shares that formed part of the open offer have now been allocated to investors with whom the open offer shares had been conditionally placed. The capital raise was approved by shareholders yesterday.
Despite nearly 44pc of shares offered to existing shareholders not being taken up by them, Stobart Group chairman David Shearer said he was “pleased” with their support.
“I would like to express my gratitude to those who have provided their support,” he said. “We look forward to repaying their trust in us by delivering on our strategic objectives in the coming years.”
Shares in Stobart Group had slumped more than 8pc by mid-afternoon yesterday, to just over 32p, giving it a market capitalisation of £145.5m. That decline was on the back of a higher than average number of shares being traded.
Stobart owns London Southend Airport. It has pledged to exit its energy business and has sold the rights to the Stobart name to raise cash.
Stobart Air has a contract to operate the Aer Lingus Regional service until the end of 2022.
The carrier is cutting up to 150 jobs, including pilots, cabin crew, engineering workers and head office staff.
“Due to depleted passenger demand and the corresponding reduction in our flying programme – along with previously advised reductions in flight deck and cabin crew – we are left with no option but to also resize our HQ administration and engineering resources at Dublin and Cork to align with these revised plans,” Stobart Air managing director Andy Jolly told staff last week.