Australia's Kelsian posts worst day in nearly 7 months on discounted capital raise

Kelsian

17/03/2023 03:54

(Adds analyst comment, updates stock movement and milestones)
    ** Shares of Kelsian Group  KLS.AX  slump as much as 11.6%
to A$5.61 after resumption of trade; post biggest intraday pct
drop since Aug. 25
    ** Co announced an A$281 mln ($187 mln) equity raising to
fund $325 mln acquisition of All Aboard America! Holdings Inc
    ** Expects deal to be upper single digit earnings per share
excluding amortisation accretive in pro forma CY22 before any
bonus adjustment
    ** Issue price of A$5.55 per new share for equity raising is
at a 11.4% discount to last close on March 13; co had requested
a trading halt on March 14
    ** "Its a relatively appropriate size for a step-out
acquisition giving KLS a footprint in the U.S. market from which
it can grow" - E&P Financial
    ** Potential for due diligence oversights, increased degree
of financial leverage, macroeconomic pressures, concerns over
ability to recover wages and foreign exchange pressures to be
risk factors to the deal - Canaccord Genuity analyst Allan
Franklin
    ** Shares hit a nearly two-month low, top loser on ASX 200
    ** Stock is up about 10.4% this year as of last close, but
on track to lose most of the gains
    
    ($1 = 1.5020 Australian dollars)

 (Reporting by Echha Jain and Mehr Bedi in Bengaluru)
 ((Echha.jain@thomsonreuters.com))