Tradeshot: Retail Food Group (RFG.ASX)
Equity and debt raise, falling share price, market capitalisation changes ...
Note: All amounts in AU$ unless otherwise stated.
Date
14th March, 2023
Security
Retail Food Group (RFG.ASX)
Current Share Price
6.7 cents
Trading History
ASX:
Source: Direct Broking
Volumes started to climb in late December, 2022 and grew substantially from the second week of January, 2023. This period saw significant rises in the share price to as high as 11.0 cents.
Normal trading volumes through 2022 were usually below 5 million per day but the last three months saw volumes as high as 40 million or more.
Source: Direct Broking
HY23 results came out on the last day of February, 2023 but the stock had been faltering from the first full week of February, 2023.
Trading was halted on the 1st March, 2023 and on the 3rd of March, 2023 a $47.4 Million Debt & Equity Capital Raising was announced.
When trading restarted volumes increased and the stock fell further. It currently trades at 6.7 cents on a lower share volume than straight after the announcement but the volumes are still higher than 2022 average volumes.
Source: Direct Broking
Commentary
The entities that made commitments for $24.9m of shares at 8.0 cents are now in a position where they could have bought the shares much more cheaply. These shares were allotted and issued on 9th March, 2023.
The $24.9 raised through the placement to sophisticated and institutional investors sees another 311.25 million shares outstanding.
The debt raising is for $20.0m while existing shareholders are being offered a total of $2.5m of shares at 8.0 cents in a share purchase plan.
The current share price of 6.7 cents is at a 16.25% discount to the offer price per share in the share purchase plan of 8.0 cents.
The current share price is at a 25.6% discount to the price of 9.0 cents the share was trading at prior to the announcement. If a shareholder doesn’t take up the placement then this is the resulting loss percentage for them at the current price level as a result of the capital raising.
However, it’s fair to say that post-capital raising the balance sheet has been improved.
Today, TIGA Trading Pty Ltd announced it had ceased being a substantial holder.