Select Harvests (ASX:SHV) capital raising announcement

Select Harvests Limited (ASX:SHV) has announced a 1 for 9.2 pro-rata accelerated non-renounceable entitlement offer of new ordinary shares at an offer price of A$3.80 per New Share to raise up to approximately A$50 million. The Retail Entitlement Offer opens on Thursday, 26 September 2024 and closes at 5.00pm (Melbourne time) on Thursday, 10 October 2024. The proceeds from the Equity Raising of up to approximately A$80.0 million will be used to primarily repay debt, fund growth initiatives, and cover transaction costs.

Executive commentary on capital raising and market dynamics

The company's 2024 crop is expected to be approximately 29,500MT, with a strong sales program and an export crop hedged at USD 66c. The almond market prices have been firm, and the company expects the 2024 crop price to be in the range of $7.70/kg - $7.75/kg. The FY24 estimates for underlying EBIT and NPAT are expected to be in the range of $17m to $19m and $1.5m to $3m, respectively. However, the company anticipates higher net debt due to slower cash collection resulting from freight delays. To address this, Select Harvests has announced a fully underwritten capital raising offer of approximately $80.0 million, comprising a placement and an entitlement offer. The proceeds from the offer will be used to repay debt, fund capacity increase, and cover transaction costs.

Summary of Select Harvests (ASX:SHV) announcement

Select Harvests (SHV) is raising approximately $80.0m through a Placement and Entitlement Offer. The funds will be used to repay debt, provide balance sheet flexibility, and for Project Optimus, a near-term capex program to expand the Carina West Processing Facility. The company's strategic priorities include disciplined execution, a balance sheet reset, and leveraging core assets to improve productive capacity. Additionally, Select Harvests aims to maximize returns from almond crops and innovate to drive step-out growth. The announcement also includes important notices, a disclaimer, and a summary of the company's strategic priorities, capital raising, key risks, underwriting agreement, and foreign selling restrictions.