28 August 2013
Collection House successfully raises $13 million and announces SPP
? Successful placement completed raising $13 million at $1.65 per share
? Share Purchase Plan (SPP) to raise up to a further $6 million at $1.65 per share
? Funds raised under the Placement and SPP will be used to strengthen the balance sheet and fund the acquisition of debt ledgers
? SPP opens on 5 September 2013 and closes on 19 September 2013
? The SPP is underwritten up to $5 million
The Directors of Collection House Limited (Company) are pleased to announce that the Company:
(a) has successfully completed a private placement to institutional and sophisticated investors at $1.65 per share to raise $13 million (Placement); and
(b) will undertake a share purchase plan (SPP) to raise up to an additional $6 million and to give eligible shareholders the opportunity to subscribe for shares at the same issue price of $1.65 per share.
The Placement was strongly supported by both existing and new institutional investors.
The issue price under the Placement was priced at a 6% discount to the volume weighted average of the closing price over the 5 trading days ending 23 August 2013 of $1.75. The issue price for the SPP will be also attractively priced at
$1.65 per share.
Funds raised from the Placement and SPP (in conjunction with the Company's debt facilities and existing cash) will be used, to strengthen the balance sheet of the Company and to take advantage of future investment opportunities, including the acquisition of debt ledgers.
In connection with the capital raising, Collection House Chairman, David Liddy said: "The Company appreciated the support of our existing major institutional shareholders and was delighted to welcome a number of new investors and institutions to the Company Share Register. The high level of interest in our business shows that institutional funds see the potential value of the Company's strong revenue from its Purchased Debt Ledger (PDL) pipeline and other
"The Company has delivered consistent results and improved performance across all key metrics including Earnings and Dividends per Share, Return on Shareholders' Equity and reduced gearing in FY13."
Managing Director and CEO, Matthew Thomas said: "This capital raising will enable the Company to maintain its lower gearing levels achieved in FY13 whilst also expanding its PDL acquisition program at a time where we are successfully identifying several attractive opportunities in the market through our extensive relationships with banks and other credit providers."
The Placement and SPP are jointly managed and underwritten by RBS Morgans Corporate Limited and Wilson HTM Corporate Finance Ltd.
The issue of shares under the Placement is expected to occur on 3 September 2013.
Details of Share Purchase Plan
The issue price under the SPP will be the same as under the Placement ($1.65) and, funds raised through the Placement and SPP, in conjunction with the Company's debt facilities and existing cash, will be used to strengthen the balance sheet of the Company and to take advantage of future investment opportunities, including the acquisition of debt ledgers.
The SPP is underwritten by RBS Morgans Corporate Limited and Wilson HTM Corporate Finance Ltd up to $5 million, and will be capped at $6 million.
The SPP will be open to all eligible shareholders of the Company who have a registered address in Australia or New Zealand as at 7.00pm Brisbane time on Tuesday 27 August 2013, being the Record Date. Shareholders, at their discretion, will be able to purchase up to a maximum of $15,000 worth of fully-paid ordinary shares in lots of either
$1,000, $2,500, $5,000, $10,000 or $15,000. If the SPP is oversubscribed, the Board reserves the right to scale back
applications at its discretion.
The proposed timetable for completion of the SPP is as follows:
Record Date of the SPP (7.00pm Brisbane time)
27 August 2013
Opening Date of the SPP
5 September 2013
Closing Date of the SPP
19 September 2013
Issue and Allotment of new shares under the SPP
1 October 2013
Quotation of new shares under the SPP
1 October 2013
The above timetable is indicative only and the Company reserves the right to vary any of the key dates above, including the Closing Date and the Issue Date, without further notice.
The SPP is non-renounceable, therefore the right to purchase shares under the SPP cannot be transferred to another party.
The full terms of the SPP, including the application form and instructions for making an application under the SPP, will be despatched to shareholders on 5 September 2013. Eligible shareholders who are qualified custodians and want to participate on behalf of any beneficiaries will be able to obtain a custodian certification form upon request to the Company's share registry.
More details relating to the Placement and the SPP are contained in the attached Overview document.
About Collection House
Collection House Limited is Australia's leading receivables manager. With almost 700 staff, our core business is providing receivables management, debt collection, debt ledger purchasing and legal services to support collection activities. We are listed on the Australian Securities Exchange and operate throughout Australia and New Zealand.
For more information please contact:
Managing Director and Chief Executive Officer
Ph: 07 3100 1245
This section of the presentation relates to the proposed conduct by Collection House Limited (CLH) of: (a) a placement to be undertaken under section 708 of the Corporations Act 2001(Cth)
THIS PRESENTATION IS PREPARED ON A CONFIDENTIAL BASIS FOR CONSIDERATION ONLY BY SOPHISTICATED, EXPERIENCED OR PROFESSIONAL INVESTORS WHO ARE INVITED BY THE ISSUER OR THE JOINT LEAD MANAGER PARTIES TO PARTICIPATE IN THE OFFER. THE PRESENTATION IS NOT TO BE DISTRIBUTED TO ANY OTHER PERSON OR MADE PUBLIC WITHOUT THE CONSENT OF THE ISSUER OR THE JOINT LEAD MANAGER PARTIES.
(Corporations Act); and
(b) a share purchase plan to be undertaken under ASIC Class Order [CO 09/425], (together the Offer),
in relation to the issue of new shares in CLH (New Shares).
The information contained in this presentation is of a general nature only and does not purport to contain all the information that a prospective investor may require in evaluating a possible investment in CLH or which would be required in a disclosure document prepared in accordance with the requirements of the Corporations Act. This presentation should not be used in isolation as a basis to accept the Offer or otherwise invest in CLH.
Statements in this presentation are made only as of the date of this presentation unless otherwise stated and the information in this presentation remains subject to change without notice. Reliance should not be placed on information or opinions contained in this presentation.
Not investment, legal or other advice
Nothing contained in this presentation constitutes investment, legal, tax or other advice.
Recipients of this presentation must make their own independent investigations, consideration and evaluation of CLH and the Offer. CLH recommends that potential investors consult their professional advisor/s as an investment in CLH is considered to be speculative in nature.
None of RBS Morgans Corporate Limited or Wilson HTM Corporate Finance Limited nor any of their respective affiliates, related bodies corporate (as that term is defined in the Corporations Act), nor their respective directors, employees, officers, representatives, agents, partners, consultants and advisors (together the Joint Lead Manager Parties) make any recommendation as to whether an investor
should participate in the Offer nor do they make any representation or warranties, express or implied, concerning this Offer or any information contained in the presentation.
Not an offer
This presentation is not a prospectus, disclosure document or offering document under Australian law or under any other law. It is for informational purposes only. This presentation does not constitute, and should not be construed as, an offer to issue or sell or a solicitation of an offer or invitation to
subscribe for the New Shares or to otherwise buy or sell securities in CLH.
Applications for New Shares can only be made using an application form and in accordance with the instructions contained either:
(a) a placement document to be prepared and issued to eligible investors; or
(b) the share purchase plan document which will be distributed to eligible shareholders of CLH
following its lodgement with ASX.
The placement will only be available to sophisticated, experienced or professional investors who qualify under section 708 of the Corporations Act.
The share purchase plan will only be available to shareholders of CLH as at the relevant record date who have a registered address in Australia or New Zealand.
No representation or liability
None of RBS Morgans Corporate Limited or Wilson HTM Corporate Finance Limited nor any of their respective affiliates, related bodies corporate (as that term is defined in the Corporations Act), nor their respective directors, employees, officers, representatives, agents, partners, consultants and advisors (together the Joint Lead Manager Parties) have authorised or caused the issue or dispatch of this presentation and none of them, except to the extent specified in the presentation, makes or purports to make any statement contained in the presentation and there is no statement in this presentation which is based on a statement from them.
To the maximum extent permitted by law, neither CLH nor any of their affiliates, related bodies corporate and their respective officers, directors, employees, advisors and agents (Relevant Parties), nor the Joint Lead Manager Parties, accept any liability as to or in relation to the accuracy or completeness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or any omission from this presentation or of any other written or oral information or opinions provided now or in the future to any person.
To the maximum extent permitted by law, CLH, the Relevant Parties and the Joint Lead Manager Parties disclaim any responsibility to inform any recipient of this presentation on any matter that subsequently comes to their notice which may affect any of the information contained in this document
and presentation and undertake no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.
No representation or warranty, express or implied is made, in relation to the accuracy or completeness of the information provided in this presentation or any other information concerning CLH otherwise provided to the recipients. No responsibility is accepted by CLH, the Relevant Parties and the Joint Lead Manager Parties for any information provided in this presentation or otherwise provided to the recipients or for any action taken by the recipients on the basis of such information.
Forward Looking Statements
This presentation contains certain "forward-looking statements". The words "expect", "should", "could", "may", "predict", "outlook", "guidance", "plan" and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are not
guarantees of future performance and involve known and unknown risks, uncertainties and other factors and are subject to significant business, economic and competitive uncertainties and contingencies associated with exploration and/or production, many of which are beyond the control of CLH, the Relevant Parties and the Joint Lead Manager Parties, that may cause actual results to differ materially from those predicted or implied by any forward-looking statements. CLH makes no representations as to the accuracy or completeness of any such statement or projections or that any projections will be achieved and there can be no assurance that any projections are attainable or will be realized or that actual outcomes will not differ materially from any forward-looking statements. The Joint Lead Manager Parties have not authorised, approved or verified any forward-looking statements.
This presentation does not constitute an offer of New Shares in CLH in any jurisdiction in which it would be unlawful.
New Shares offered under the placement may not be sold or offered in any country outside of Australia. New Shares offered under the share purchase plan will only be available to shareholders of CLH as at the
relevant record date who have a registered address in Australia or New Zealand.
This Presentation does not constitute an offer to sell, or a solicitation to buy, any securities in the United States. New Shares in CLH have not been, nor will be, registered under the U.S. Securities Act of 1933 (U.S. Securities Act) or the securities laws of any state or other jurisdiction of the United States. Accordingly, New Shares in CLH may not be offered or sold, directly or indirectly, in the United States, unless they have been registered under the U.S. Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the regulation requirements of the U.S. Securities Act and any other applicable securities laws. This Presentation may not be released or distributed in the United States.
CAPITAL RAISING DETAILS
Offer size and structure
Capital raising of up to approximately $19m by way of:
? Fully underwritten Placement of approximately 7,878,000 new ordinary shares to be issued to
Institutional and Sophisticated Investors to raise approximately $13m
? Share Purchase Plan (SPP), underwritten to $5m, will be capped at $6m (approximately
3,636,000 shares) which will provide eligible shareholders as at the Record Date with the opportunity to purchase up to $15,000 worth of new ordinary shares
Capital raising shares will be entitled to the FY13 full year dividend of 3.6 cents per share
Offer Price The Offer price for the Placement and SPP of $1.65 per new ordinary share which represents:
? 6% discount to the 5 day VWAP of $1.75
Funds raised from the Placement and SPP (in conjunction with the Company's debt facilities and existing cash) will be used to strengthen the balance sheet and to take advantage of future investment opportunities, including the acquisition of select debt ledgers/portfolios, as they arise, to improve shareholder value
RBS Morgans Corporate Limited and Wilson HTM Corporate Finance Limited are Joint Lead
Managers and Underwriters to the Placement and SPP
Changes in macroeconomic factors such as an increase in interest rates and cost of living may impact debt recoverability levels.
Regulatory environment and adverse publicity
Reliance on key personnel and staff
Loss of key clients
Ability to accurately determine the price of debt ledgers
Collection House must ensure that there are no material breaches of the relevant existing legislation in relation to its debt collection practices (eg Competition and Consumer Act, Privacy Act etc). If a material breach occurs, it could have an adverse effect on the reputation of the Company and the ability to retain existing business and attract new business.
The success of companies in the collection industry is heavily dependent on their ability to hire and train collection personnel. Collection House needs to retain its existing trained workforce and attract new personnel as it grows. While the Company has initiatives in place to mitigate the risk of its key staff leaving, the loss of such staff may have a negative impact on Collection House.
Meeting the needs of clients is critical and a loss of key clients or margin pressure may have a negative impact on Collection House. The Australian market for Purchased Debt Ledgers (PDLs) is limited and is heavily weighted toward the four major Australian banks. The Company ensures it minimises the risks of loss of a key client by, in general, no one client representing a significant proportion of the Company's revenue and a comprehensive process of pro-active and superior professional service to clients to meet their needs.
The price paid for a debt is critical to being able to make a profit on any debt purchase and Collection House has invested significant resources in being able to accurately price debts prior to submitting a bid to purchase and has the appropriate highly skilled and trained personnel to make the accurate assessments of the correct price to be paid for debts.
KEY RISKS (continued)
Ability to value an existing purchased debt portfolio
Reduced returns on PDLs
Collection House must have the information systems and employee skills (which enables the Company to accurately price debts) to manage the purchased debt portfolio on an ongoing basis and take appropriate action (eg sell, trade portfolios), if required.
Lower than forecast returns from PDLs could result in lower than anticipated profits and write downs in the value of Collection House's debt ledgers.
Ongoing access to capital
Collection House requires continuing access to debt and equity capital to achieve sustainable growth. A downturn in equity markets or a restriction on debt capital availability could restrict the Company's ability to access the capital required to continue its growth.
Competition Increased competition from both domestic and international competitors could impact Collection House's ability to purchase PDLs in the future.
General risks An investment in Collection House is also subject to general risks including those related to the share market (such as volatility and liquidity risks), general economic conditions, accounting standards, taxation, Government actions and relevant legislation.
Trading Halt Commences Monday, 26 August 2013
Analyst Conference Call Monday, 26 August 2013
SPP Record Date Tuesday, 27 August 2013
Outcome of Placement Announced and Trading Resumes Wednesday, 28 August 2013
Settlement of Placement (T+3) Monday, 2 September 2013
SPP Open Date: Anticipated Despatch of SPP Offer Document Thursday, 5 September 2013
Despatch Date for Placement Holdings Statements Thursday, 5 September 2013
New Shares Issued Under the Placement Commence Trading on a Normal Basis Thursday, 5 September 2013
SPP Close Date (5pm AEST)
Thursday, 19 September 2013
SPP Shortfall Notification Date (By 12pm AEST) Wednesday, 25 September 2013
SPP Settlement Date Monday, 30 September 2013
Issue Date of New Shares Under the SPP Tuesday, 1 October 2013
New Shares Issued Under the SPP Commence Trading on a Normal Basis Tuesday, 1 October 2013
Despatch Date for SPP Holding Statements Wednesday, 2 October 2013
Collection House Shares Trade Ex-Dividend Wednesday, 2 October 2013
*Timetable is indicative and subject to change