Engineering contractor MacMahon Holdings has successfully secured $46 million in equity from institutional investors, an Australian Securities Exchange (ASX) statement from the company read.
The money is part of a $60 million equity issue that the company announced it was initiating last week.
The money raised from institutional investors leaves a shortfall of $14 million which MacMahon plans to raise from it small shareholders.
The company yesterday invited shareholders to participate in the placement, offering a 20% discount on the shares at an issues price of $0.32 per share.
MacMahon said that the money raised will be used to repay debts and provide flexibility to pursue future business growth opportunities.
The contractor’s 2009 profit is projected to be lower than expected at between $15 and $20 million.
According to MacMahon chairman Richard Carter, the fall in profit was due to numerous outside factors.
“The decline was caused by a number of factors including ongoing challenging conditions in the mining business, slower than expected progress in recovery of claims, a number of one-off impacts including severe weather events and restructuring and redundancy costs,” he said.
“The impact of these events has been an increase in MacMahon’s working capital requirements, a decrease in cash reserves and an increase in gearing.”