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Breville Mulls Equity Raise After Guidance Withdrawal

ASX-listed kitchen appliance manufacturer, Breville Group, is tipped to announce an equity raising of around $100 million – its first since listing in 1999 – with the company entering a trading halt as it prepares.

The trading halt, which commenced on May 13, has been sought as it’s “considering, planning for, and expects to announce a proposed capital raising” prior to Friday, May 15.

According to AFR’s Street Talk, Breville Group has tapped Goldman Sachs and UBS bankers for the equity raising, which could be around $100 million via a rights issue to existing shareholders.

In March, the company withdrew its earnings guidance for the 2020 financial year (which was issued in February with interim results) following the economic impact of coronavirus.

Breville had initially expected to announce EBIT of $110 million for the year to June 30.

“Although Breville’s year-to-date performance is consistent with the achievement of the 13th February guidance, given the disruption that the coronavirus is driving across our major markets, we no longer feel it is appropriate to provide earnings guidance,” read company’s announcement in March.

As at March 26, the group’s consolidated cash balance was at $64 million. It had drawn $98 million on a committed $273 million working capital facility, with $175 million available at the time. 

The group revealed it also has a further committed seasonal working facility of up to $112 million available during its peak August to January season. 

The company has a market cap of $2.44 billion, with renowned investor Solomon Lew its biggest shareholder as per the recent annual report (over 30% stake).

Breville Group is in a trading halt, with shares closing at $18.70.

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