Australian conglomerate Wesfarmers has said that it intends to raise A$2.8bn in cash through a new share issue as it faces pressure to pay-down debt in the face of the mounting global financial crisis.
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Wesfarmers raised its debt levels in order to fund its A$18.2bn takeover of Coles, Australia’s second largest supermarket company, last year.
Wesfarmers needs to refinance A$2.2bn in debt by the end of this year and A$5bn in 2010, the company revealed.
In a filing with the Australian stock exchange, the coal-to-groceries conglomerate said it would issue shares at A$13.50 a share in order to raise A$1.9bn.
New shares will also be placed with mutual funds managed by Capital Research Global Investors and Colonial First State, at A$14,25 per share, in order to raise an additional A$900m.
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By GlobalData“These measures will provide Wesfarmers with increased flexibility to repay, refinance or roll-over all remaining debt,” the company said.
Based on its first-half results, Wesfarmers said that it expected its full-year dividend to total A$0.50 per share.
