19 October 2020
HIGHLIGHTS:
- Pureprofile has formalised a recapitalisation plan (the Recapitalisation Plan) to strengthen its balance sheet and reduce its existing debt burden.
- Under the Recapitalisation Plan, Pureprofile will undertake a fully underwritten 8 for 1 renounceable pro rata rights issue to existing shareholders to raise $18.80m (the Entitlement Offer).
- Contemporaneous with the Entitlement Offer (and conditional on its completion), the remaining balance of the Lucerne debt will be forgiven and replaced by a new $3m fully-drawn facility (New Facility).
Pureprofile Limited (ASX: PPL) or (the Company), a global leader in data acquisition, analysis and insights, is pleased to announce it has formalised a recapitalisation plan to strengthen the Company’s balance sheet (the Recapitalisation Plan).
The Recapitalisation Plan sees the company significantly reduce its existing debt and boost available cash, which in turn reduces ongoing costs and positions Pureprofile for growth. The Recapitalisation Plan consists of two inter-related components – the Entitlement Offer and the New Facility.
Details of the Recapitalisation Plan are provided below.
The Entitlement Offer
Shareholders of Pureprofile will be invited to participate in a fully underwritten 8 for 1 renounceable pro rata rights issue to raise $18.80m (the Entitlement Offer).
Eligible shareholders can request their personalised Entitlement Offer application form at – https://pureprofile.investorportal.com.au/request-forms/
For every one share held, existing shareholders will be able to subscribe for eight additional shares (New Shares) at an issue price of $0.02 per share (the Issue Price). The Issue Price represents an approximate discount of 17% to the closing price on the day of last trade of $0.024.
Shortfall Shares
Any New Shares not applied for under the Entitlement Offer will form part of the shortfall from the Entitlement Offer (Shortfall Shares). The Shortfall Shares will be offered at the Issue Price to:
- shareholders who are not related parties of the Company (as defined under the Corporations Act 2001 (Cth)) and who wish to apply for Shortfall Shares in addition to the New Shares they would be entitled to under the Entitlement Offer; and
- other investors who are not shareholders of the Company.
Fully underwritten
The Entitlement Offer is fully underwritten by Lucerne Finance Pty Ltd (Lucerne) and Peloton Capital Pty Ltd (Peloton).
$15.3m has been underwritten by the Company’s existing lender, Lucerne, via a debt to equity conversion. The remaining balance of the Company’s existing debt (approximately $7.3m as at 30 September 2020) will be forgiven and a new debt facility put in place (for more information, refer to details below).
Use of funds
The Company intends to use the proceeds of the Entitlement Offer as follows:
- partially pay down the Company’s existing debt;
- inject funds into the sales team and global panel partnership;
- continue to commercialise the Company’s technology;
- provide working capital for the Company; and
- pay the costs of the Entitlement Offer.
The initial $3.5m of funds raised (the Initial Funds) will be allocated to Pureprofile’s working and growth capital. Additional funds received in excess of the Initial Funds will be applied towards the existing Lucerne debt to reduce Lucerne’s post-rights issue shareholding.
Reach Markets are the advisers assisting with the Entitlement Offer and further information on the Entitlement Offer can be found at – https://pureprofile.investorportal.com.au/rights-issue/
Indicative Timetable to the Entitlement Offer
| Event | Date |
|---|---|
| ASX Announcement | Monday, 19 October 2020 |
| Lodgement of Prospectus with ASIC | Monday, 19 October 2020 |
| Lodgement of Prospectus and Appendix 3B with ASX | Monday, 19 October 2020 |
| “Ex” Date for Entitlement Offer Entitlement trading commences on a deferred settlement basis | Wednesday, 21 October 2020 |
| Record Date for determining Entitlements | 7.00pm (AEDT) on Thursday, 22 October 2020 |
| Prospectus and Entitlement and Acceptance Form despatched to Shareholders Entitlement Offer opens | Tuesday, 27 October 2020 |
| Entitlement trading ends | Tuesday, 10 November 2020 |
| Shares quoted on a deferred settlement basis | Wednesday, 11 November 2020 |
| Last day to extend Closing Date | Thursday, 12 November 2020 |
| Entitlement Offer Closing Date | 5.00 p.m. (AEDT) on Tuesday, 17 November 2020 |
| Announcement of results of Entitlement Offer and under-subscriptions | Friday, 20 November 2020 |
| Issue of Offer Shares under the Entitlement Offer | Tuesday, 24 November 2020 |
| Commencement of trading of Offer Shares | Wednesday, 25 November 2020 |
Information for shareholders
Full details of the Entitlement Offer, including the potential control implications, a summary of the underwriting agreements and fees payable to the underwriters, as well as a summary of key risks associated with an investment in the Company, are contained in the Prospectus, lodged with the ASX as at the date of this announcement.
Shareholders with any questions regarding the Entitlement Offer may contact Reach Markets on 03 8080 5795 or email advisers@reachmarkets.com.au.
Eligible shareholders can request their personalised Entitlement Offer application form at – https://pureprofile.investorportal.com.au/request-forms/
The New Facility
Pureprofile and its existing lender, Lucerne, have entered into a new agreement in respect of its debt facility (the New Facility), which is conditional on the completion of the Entitlement Offer outlined above.
Key terms of the agreement:
- Debt forgiveness – following completion of the Entitlement Offer and allocation of funds under that offer against the existing debt, the remaining balance of the facilities (~ $7.3m of debt as at 30 September 2020) will be forgiven;
- New $3m facility – replacing the previous facilities will be a new, fully-drawn $3m loan facility;
- Interest on New Facility – interest rate of 8.5% per annum (payable quarterly);
- Maturity of New Facility – 3 years from the date of completion of the Entitlement Offer and payable in advance at the Company’s discretion;
- No performance covenants – the New Facility does not contain business performance covenants; and
- Performance rights cancelled – the performance rights that were previously issued to Lucerne have been cancelled.
The New Facility is subject to warranties, indemnities, fees and default fees and terms, which the Company considers usual for a transaction of this size and scope.
Material terms of the facility were disclosed to the ASX on 2 November 2017, 28 February 2019, 25 June 2019, 28 August 2019, and 27 September 2019.
| $ million | Full subscription |
|---|---|
| Existing shares on issue | 117.5 |
| New shares offered under the Entitlement Offer | 940.2 |
| Amount raised under the Entitlement Offer (before costs) | $18.8 |
| Market capitalisation (at last sale price of $0.024) | $25.4 |
| Cash | $5.3 |
| Debt | $3.0 |
| Enterprise value | $23.1 |
CEO Commentary
Martin Filz, Pureprofile CEO, said: “The recapitalisation of Pureprofile is the final step in a turnaround strategy that leaves the company substantially unencumbered by debt, with cash in the bank and positioned for growth.
“Operationally, Pureprofile has already been performing strongly the past year. With EBITDA growing to $1.6 million in FY20, the business is now able to significantly leverage its unique data acquisition platform and insights capabilities to unlock shareholder value.
“Having joined Pureprofile as CEO in August this year, I’m tremendously excited to be leading a talented and refreshed executive team that will drive Pureprofile forward as a leader in the fast-growing digital economy.”
This announcement has been authorised by the Board of Directors of Pureprofile Ltd.
Prospectus
Entitlement Offer – Investor Presentation
– ENDS –
