I like the capital raise.
TIL's debt is now quite big compare to EBITDA.
so TIL has 2 choices:
1: slow down and reduce debt level
2: continue to fast expand and capital raise
obviously option 2 is a better choice for current situation.
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I like the capital raise.
TIL's debt is now quite big compare to EBITDA.
so TIL has 2 choices:
1: slow down and reduce debt level
2: continue to fast expand and capital raise
obviously option 2 is a better choice for current situation.
There is a market darling stock on the ASX called BWX. They have an almost identical business to TIL except they are not organic.
BWX are trading on a FY17 EV/EBITDA=16.6
TIL are trading on a FY17 EV/EBITDA=11.8 (using Analyst forecasts)
If TIL attracts the same multiple as BMX, they will be trading at $5.64
This is the main reason I think today's announcement is brilliant.
https://www.nzx.com/companies/TIL/announcements/284181
All done. Now to see what the Aussie instos do.
Going to be a pretty big dilution with 9.4 million new shares (the acquisition and the cap raise) relative to the 61.9 million shares currently.
But what the heck its all for the good - maybe a smaller piece of the pie but pie going to get pretty big.
If TIL is able to get 2 or 3 of the big Oz funds into TIL, the sp will fly for sure. I recall talking to one of the Oz big fund managers at a company function recently and he lamented the fact that NZ market is so small and so hard to get set in good emerging stories. Their mandate is that they must invest a minimum of A$60m in any one stock! Hence their preference to invest in good stories via placements.
On the other hand, some of the fund managers there are also very aggressive traders and they will not hesitate to make their quick 10% to 20% in IPOs and placements by flicking out quickly.
Let's hope TIL placed the shares with the right funds.
The $30m shares sold by the business bakery chaps are already issued and are only a transfer between entities. So I think it'd only be the issuance of 5.4m shares to cover the $20m placement right?
They going to issue 2.6 million shares for the Forestal Casino acquisition as well