The Market Herald issues discounted shares to pay down debt

In an ASX announcement, The Market Herald said it is offering new shares with a 15% discount rate for shareholders, in a bid to raise funds and pay down debt from purchasing Gumtree, Carsguide and Autotrader.

The company halted its trading yesterday afternoon in preparation for the announcement.

The “fully underwritten renounceable entitlement offer” has been put forward to shareholders on the basis of one new share for every six shares, with an issue price of $0.34 per new share, aiming to raise approximately $15.52 million.

Any entitlements not taken up by shareholders will then be offered to certain institutional investors, at the conclusion of the deal’s offering period.

Gumtree, Carsguide and Autotrader were acquired by The Market Herald in August last year. Subsequently in October, the company made around 50 staff redundant.

Adevinta, the European classifieds company, has yet to receive the $60.1 million it is owed by The Market Herald. The payback deadline was also renegotiated to 31 May.

As of 24 January, its share price sits at $0.40, with a market capitalisation of $108.25 million.