Two Australian firms to raise $494 million in equity as regional capital markets remain slow

Steadfast

16/11/2023 01:18

By Scott Murdoch
       SYDNEY, Nov 16 (Reuters) - Two Australian companies,
Karoon Energy  KAR.AX  and insurance broker Steadfast Group
 SDF.AX , are raising A$760 million($494 million) in separate
equity financings on Thursday to partly fund asset purchases in
a rare burst of activity for the region's slow capital markets.
    Karoon is aiming to raise A$480 million in a two-part deal
that comprises a A$310 million pro rata accelerated
non-renounceable entitlement offer and a $A170 million
institutional placement of new shares, according to its
regulatory filings.
    Up to 234 million new shares will be issued, which is about
41% of the firm's current issued capital, and will be priced at
A$2.05 per share, the filings showed.
    The price is a 14.6% discount to Karoon's closing price of
A$2.40 on Tuesday, before the stock halted trading on Wednesday.
    Karoon said the transaction, which is underwritten by
Macquarie Capital, will partly fund its purchase of a 30%
interest in the Who Dat and Dome Patrol oil and gas fields off
Louisiana in the Gulf of Mexico.
    Separately, Steadfast said it was aiming to raise $A280
million in an institutional placement to fund the purchase of a
70% stake in Sure Insurance, a regional underwriting agency. It
will also raise $A30 million from retail investors.
    A book build was under way on Thursday with a minimum price
of $A5.06 set by the company and its underwriters, JP Morgan and
UBS.
    Australia's capital markets have not escaped global 
weakness as high interest rates and geopolitical events dent
investors appetite for new deals.
    Total follow-on capital raisings in Australia reached $11.43
billion in the first three quarters of 2023, according to LSEG
data, down 13.6% from the same period in 2022.

 (Reporting by Scott Murdoch in Sydney; Editing by Cynthia
Osterman)
 ((Scott.Murdoch@thomsonreuters.com;))