ALLENS Arthur Robinson has advised Leighton Holdings as it becomes the first company this year to make a substantial capital raising to strengthen its balance sheet.
Allens advised Leighton Holdings on the equity capital raising by way of entitlement offer.
The raising is a fully underwritten one-for-nine pro-rata accelerated renounceable entitlement offer of new Leighton ordinary shares at an offer price of $22.50 per new share to raise approximately $757 million.
The Australian newspaper reports that one the face of it, it's a generous discount of 22.3 per cent to Leighton's previous closing share price of $28.94, and a discount of 20.5 per cent to the theoretical ex-rights price of $28.29 a share.
Leighton's major shareholder, the German group Hochtief, has already committed to take up its full entitlement of 54 per cent. This means that just over $400m of the issue is "already in the bag", the newspaper reports.
The proceeds from the entitlement offer will be used to strengthen Leighton’s balance sheet as well as provide financial flexibility to pursue growth opportunities and support investment grade credit rating metrics, Allens said in a statement.
The law firm's partners Ewen Crouch, Andrew Finch and Vijay Cugati coordinated the Allens team.
The lawyers worked under tight deadlines to get the entitlement offer to market within a week, the firm said.
The transaction follows the completion of a major review of Leighton's operations and asset base, which resulted in a revision of the profit forecast for the 2010/11 financial year, Finch said .
"Allens worked very closely with Leighton's senior management team, who were able to confirm the positive outlook and solid fundamentals of the underlying Leighton businesses, enabling the offer to be fully underwritten."
UBS is underwriting the remaining $350m for an underwriting fee of 1.25 per cent and a management and arranging fee of 1.25 per cent, an aggregate of 2.5 per cent, or $8.725m.