Treasury Group attracts interest for capital raising
Treasury Group is expected to increase its stake in Northern Lights Capital Group following a successful capital raising which was oversubscribed by more than five times the initial figure sought by the company.
In its quarterly funds under management (FUM) update the listed group stated that while its funds under management (FUM) only increased by 1.8 per cent to $50.9 billion it was expected to increase its 61.22 per cent stake in the merged entity once the capital raising is complete.
In November last year Treasury Group merged with Northern Lights boosting the former's FUM from $26.4 billion to $50 billion within the combined entity and stating that December FUM figures would reflect 21 weeks of pre-merger performance and five weeks of post-merger performance.
In the figures released for the December quarter the group stated FUM had been affected by the weakening Australian dollar and around $666 million of outflows across its retail and institutional investments.
However it received strong support from around 22,000 retail investors who had applied for approximately $27 million as part of a share purchase plan (SPP) which has followed an institutional capital raising of $30 million. As a result Treasury Group stated it would lift the SPP to $10 million but would only be able to offer subscribers 37 per cent of the shares applied for.
In its initial SPP documents Treasury Group stated it would use around 10 per cent of the $35 million raised to buy out smaller interests in Northern Lights and the remainder as working capital and for current and future investment opportunities.
AUTHOR
Jason Spits
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