By James Atkinson

Woolworths will retain its 25 per cent share in Gage Roads Brewing under the terms of a $7.4 million share placement to the retailer and institutional investors.

Gage Roads offered a total of 36,950,000 shares to institutional investors at a price of $0.15 per share to raise $5,542,500.

Woolworths will exercise its right to retain its 25 per cent proportional share in the brewer by acquiring an additional 12,481,439 shares to raise $1,872,216.

The retailer has been offered a further $1,082,000 shares at an average price of $0.63 under its top up rights from prior dilution events that occurred when employee shares were issued during the 2012 financial year. The issue price of these shares is based on the issue price paid for the shares at the time of the prior dilution events.

The total $7.48 million in proceeds are expected to be applied towards partial repayment of Gage Roads' debt facility with ANZ Bank and improvement of the brewer's working capital position.

Gage Roads also announced it will offer 3,333,333 ordinary shares to existing shareholders at a price of $0.15 per share, raising up to $500,000 that will be applied towards working capital.

The brewer said it is now at the midpoint of its four-year growth plan and has already delivered "most of the capacity increases" required to triple production capacity to three million cartons per annum by the 2015 financial year.

Gage Roads also announced the expansion of its east coast draught beer supply contract with the Woolworths majority-owned ALH Group, with a 127 per cent increase in keg sales in the year to date.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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