Pacific Brands is seeking to raise up to A$256 million ($322 million) to reduce debt through an equity capital raising.
The clothing manufacturer said it would conduct a A$30 million fully underwritten placement to institutional shareholders and a non-renounceable entitlement offer to all eligible shareholders.
The entitlement offer will be
made up of a fully underwritten institutional component of A$124 million and a non-underwritten retail component of up to A$102 million.
Eligible shareholders will be able to subscribe for three new shares for every four shares owned.
Pacific Brands chief executive Sue Morphet said the proceeds of the capital raising would be used to reduce debt.
"This capital raising will improve Pacific Brands' balance sheet and provide the company with additional financial flexibility," Ms Morphet said.
"The raising will place Pacific Brands in a much stronger financial position and better position the company to withstand any further softening in the retail environment."
If fully accepted, the capital raising will reduce the company's net debt from 3.2 times its earnings before interest, tax, deprecation and amortisation (Ebitda) to 2.2 times, Ms Morphet said.
Pacific Brands - which can trace its origins back to 1893 with the manufacture of Dunlop tyres - was purchased in 2001 by private equity firms CVC Asia and Catalyst. Now it produces a range of brands including Berlei, Bonds, Sleepmaker, Sheridan and Hush Puppies.
It has about 400 workers in New Zealand, after cutting 89 in March.
Pacific Brands had A$810.8 million in net debt at December 31, with current debt facilities of A$1.05 billion.
It announced last month it had refinanced its debt facilities and the next significant maturity is now March 2012.
The outcome of the institutional components of the capital raising will be announced tomorrow, when its shares are also expected to resume trading.
In February, Pacific Brands announced major measures to reduce its debt, including job cuts, shifting manufacturing operations overseas and selling some of its properties. It said on Monday it had commenced several separate processes to divest non-core business, brands and property.
"Pacific Brands has received a large number of expressions of interest from a diverse range of parties in relation to possible divestments of non-core assets and, as a result, Pacific Brands is currently in discussions with a number of third parties," the company said.
"Pacific Brands is not committed to the divestment of any particular business if it considers that insufficient value would be delivered for that business."
The company also reaffirmed its fiscal year guidance of no more than a 15 per cent variation in operating profit on the previous year, before income tax and restructuring costs.AAP
- AAP
Pacific Brands is seeking to raise up to A$256 million ($322 million) to reduce debt through an equity capital raising.
The clothing manufacturer said it would conduct a A$30 million fully underwritten placement to institutional shareholders and a non-renounceable entitlement offer to all eligible shareholders.
The entitlement offer will be
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