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Australasian childcare operator ABC Learning Centres plans to raise about US$80 million ($106 million) by selling new shares to Morgan Stanley Private Equity, a source familiar with the deal said.
The new funding comes after ABC agreed to sell 60 per cent of its US business to Morgan Stanley Private Equity in April to cut its debt.
ABC shares were placed on trading halt ahead of a planned capital raising.
ABC became a high profile Australian casualty of the credit crisis after its shares collapsed in February on concerns over high debt levels.
ABC shares last traded at A$1.35 each, giving it a market value of A$644 million. ABC pursued a debt-funded expansion and bought childcare operators in the US and the UK. The stock traded as high as A$8.45 last year.
But as credit became more expensive, ABC struggled to refinance its short-term debt which led to the sale of part of its stake in the US business.
Founder and chief executive Eddy Groves had to sell nearly all his stake in the company as a steep fall in the share price triggered margin calls on loans he had taken with his shares as security.
- REUTERS