Pharmacy Daily | Blackmores seeks capital

BLACKMORES Limited this morning announced a $117 million capital raising to "position the balance sheet for strength," with the impact of COVID-19 driving sales down due to lower shopping traffic.

The company is undertaking a fully underwritten placement which will see about 1.3 million new shares issued, equivalent to 7.3% of the company's current shares on issue.

The placement is being conducted at $72.50 per new share, a discount of 8.1% to the company's closing price yesterday.

Eligible shareholders in Australia and New Zealand will also be offered the opportunity to apply for up to $30,000 of new Blackmores shares at the same price, with the company targeting $25 million from this share purchase plan.

However the company's major shareholder, Marcus Blackmore (pictured), said he would not be participating in the equity raise.

"Along with my Charitable Foundation I am personally pleased to support Blackmores announced capital raising," he said.

"Unfortunately I am unable to participate in the equity raising at this time, however Blackmores has been an integral part of my family since 1932 and needless to say I am absolutely committed to being a long term shareholder," he said.

Blackmores has suspended its ordinary share dividend payments "to conserve cash for operations" and also worked with lenders to provide additional flexibility through until Jun 2021.

As well as bolstering the balance sheet, the capital raising will help accelerate growth in Asia and assist with investments in supply and IT in order to make Blackmores' manufacturing and business processes more efficient.

While COVID-19 had seen a material increase in demand for immunity products, these only comprise a small part of the Blackmores portfolio and the boost has been offset by lag in other products due to a decline in retail traffic and supply chain constraints.