13 Jun 2012

Rubicon plans $21m capital raising

1:52 pm on 13 June 2012

Loss-making Rubicon plans to raise $21 million from shareholders which it says will help meet the company's funding needs to early 2014.

Under the proposed deal, Rubicon will offer shareholders one share for every three held, at a price of 22 cents each.

The funds raised will be used to repay debt and extend the company's existing $US20 million banking facility.

Rubicon has two investments, biotechnology firm ArborGen and the US-based wood mouldings firm Tenon.

ArborGen, in which Rubicon is a third owner, is yet to become commercially viable, and last year a planned share float of the business was abandoned due to poor market conditions.

Tenon is also struggling due to a weak housing market.

Rubicon says the money raised will help fund ArborGen's operational plans for another year, and help prepare it for another tilt at a share float on US equity markets.

The company says that should then bring an end to any further cash handouts.

Under a commitment with its bank, ANZ, Rubicon has to raise at least $US12.5 by June 2013, of which $US7.5 million must be repaid by the end of July this year.

ANZ will then extend its banking facility for another year, though the bank also wants to see satisfactory progress towards ArborGen listing by 2014.

Rubicon's largest shareholder David Knott and other investors which together hold 31% of the company intend taking up the offer.