Income Asset Management Group's strategic equity raise

Income Asset Management Group (ASX:IAM) has launched a fully underwritten renounceable pro-rata entitlement offer. The offer is set at 1.51 new shares for each existing share, priced at A$0.03 per share, aiming to raise approximately $15 million. This initiative is part of a larger $18 million equity raising plan.

Understanding IAM's financial strategy and future outlook

Income Asset Management Group (ASX:IAM) is embarking on a significant financial strategy by announcing a fully underwritten renounceable pro-rata entitlement offer. The offer aims to raise $15 million at an offer price of A$0.03 per share, with a ratio of 1.51 new shares for every existing share held. This offer is part of a broader $18 million equity raising effort, which includes a two-tranche institutional placement. The primary use of the funds will be to repay $10 million in outstanding notes, reduce annual cash interest expenses by $1.2 million, and support working capital for business growth and restructuring. The offer, underwritten by Blue Ocean Equities Pty Limited and Morgans Corporate Limited, is also notable for strategic participation by certain directors and key management. IAM's future outlook is focused on resetting the business around core fixed income offerings and achieving cost reductions through partnerships, such as the recent agreement with Perpetual Corporate Trust for outsourcing custody and settlement operations.

Executive insights on the entitlement offer

The funds will be used primarily for the repayment of outstanding IAM notes, reducing cash interest expenses, and providing working capital to support business growth and restructuring costs.