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Pan Pacific Aggregates

  • BY: Andrew Hore |
  • POSTED: 19/07/2011 |

Pan Pacific Aggregates is raising £1.335m at par value of 0.1p a share in order to keep trading and make the most of the potential of its Canadian quarry.

The net proceeds of the placing are £1.22m and that should be enough to provide working capital for the time being. An equity backed revolving finance facility of £500,000 has been agreed in principle and that could rise to $2m. There is also a potential standby equity distribution agreement that could raise a further £3m over the coming months. Pan Pacific plans to refinance a £1.08m mortgage on its property.

There had been plans to raise £3m from a placing and a further £2m from an open offer so that the dilution of existing shareholders was reduced.

Executive chairman Euan McAlpine is investing £75,000 in the placing including the capitalisation of his salary. He will own 4.4% of Pan Pacific.

A CVA has been agreed and Pan Pacific has to pay £500,000 to the CVA supervisor in the next 18 months.

Zeus Capital has taken over as nominated adviser from Matrix and Alexander David has become joint broker with XCAP.

The shares have returned from suspension following the publication of 2010 figures.

The 17 January suspension price was 0.38p a share and the shares slumped to the placing price of 0.1p when they returned. The Canadian quarry operator is valued at £2.37m before the latest fundraising. There will be nearly 4bn shares in issue after the fundraising. 

Revenue was £714,000 in 2010, while the loss increased from £1.12m to £3.97m. The cash outflow from operations was £1.54m because the majority of the loss was non-cash items. There was still £525,000 in the bank at the end of 2010.

Sales in the second quarter were more than double the same period the previous year and the average selling price per tonne increased 16%.
Download the June 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFJuly2011_22.pdf

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