Two Australian firms to raise $494 million in equity as regional capital markets remain slow

By Scott Murdoch

SYDNEY, Nov 16 (Reuters) - Two Australian companies, Karoon Energy KAR.AX and insurance broker Steadfast Group SDF.AX, are raising A$760 million($494 million) in separate equity financings on Thursday to partly fund asset purchases in a rare burst of activity for the region's slow capital markets.

Karoon is aiming to raise A$480 million in a two-part deal that comprises a A$310 million pro rata accelerated non-renounceable entitlement offer and a $A170 million institutional placement of new shares, according to its regulatory filings.

Up to 234 million new shares will be issued, which is about 41% of the firm's current issued capital, and will be priced at A$2.05 per share, the filings showed.

The price is a 14.6% discount to Karoon's closing price of A$2.40 on Tuesday, before the stock halted trading on Wednesday.

Karoon said the transaction, which is underwritten by Macquarie Capital, will partly fund its purchase of a 30% interest in the Who Dat and Dome Patrol oil and gas fields off Louisiana in the Gulf of Mexico.

Separately, Steadfast said it was aiming to raise $A280 million in an institutional placement to fund the purchase of a 70% stake in Sure Insurance, a regional underwriting agency. It will also raise $A30 million from retail investors.

A book build was under way on Thursday with a minimum price of $A5.06 set by the company and its underwriters, JP Morgan and UBS.

Australia's capital markets have not escaped global weakness as high interest rates and geopolitical events dent investors appetite for new deals.

Total follow-on capital raisings in Australia reached $11.43 billion in the first three quarters of 2023, according to LSEG data, down 13.6% from the same period in 2022.

(Reporting by Scott Murdoch in Sydney; Editing by Cynthia Osterman)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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