Tower raises $96 million in entitlement offer
Tower Australia Group has raised about $96 million, despite the prevailing analyst sentiment that it was not a good time to engage in a capital raising.
In an Australian Securities Exchange (ASX) announcement, Tower stated it had offered about 52 million new shares, of which about 46 million were taken up by existing shareholders or investors who acquired entitlements on the ASX or otherwise. Tower stated the shortfall would be offered to institutional investors under a book build, and that the underwriters would take up the shares not subscribed for.
Tower Australia chairman Rob Thomas said the high level of shareholder participation was pleasing, particularly since the entitlement offer was well supported by institutional and retail investors.
The capital raised would go towards new partnerships and growth areas, particularly in growing new distribution alliances and group life clients, the announcement stated. Tower also aims to build on its strategy to increase retention and reduce the use of reinsurance to improve shareholder returns. Thomas said this strategy involved investing in new technologies and platforms for improved service delivery.
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