WestStar Industrial is set to support its strong project pipeline with top tier customers including Rio Tinto, MSP Engineering, Talison Lithium and Tianqi Lithium with a funding boost.
The company will undertake a placement following WestStar’s recent contract wins and positive upturn in the market.
WestStar has received strong support for the $2.4 million placement from domestic and international institutional and professional investors. It is “especially pleased” to welcome new investors as shareholders of the company to supplement the investment of long-term supporters, WestStar said.
The placement price of two cents represented a 13 per cent discount to WestStar’s last closing price of 2.3 cents and an 8.8 per cent discount to its five-day volume weighted average price.
The funds will be used to assist WestStar’s delivery on both anticipated growth in its contracted projects and “high confidence” project pipeline, WestStar said in an ASX statement.
The placement will also support WestStar’s concrete fabrication business Precast Australia and strengthen WestStar’s general working capital.
WestStar’s construction contractor subsidiary SIMPEC won a series of work in December 2018, including Rio Tinto’s Cape Lambert port facility and Robe River joint venture project, West Angelas in the Pilbara and Tianqi Lithium’s Kwinana processing plant in Western Australia, the last of which was SIMPEC’s largest contract at the time.
“With WestStar already having accumulated contracts totalling ~$33 million for the current financial year, proceeds from the placement will be used to further accelerate the growth of the WestStar businesses and strengthen its balance sheet,” chief executive Robert Spadanuda said.
“With general sentiment improving and both Precast Australia and SIMPEC continuing to be very active in tendering, the placement is considered to be a prudent step in continuing the momentum that has been generated over the past year.”