[SYDNEY] Australian investment conglomerate Macquarie Group said on Wednesday it would raise about A$1 billion (S$93.7 million) via a private share placement for investment in the renewable energy, technology and infrastructure sectors.
The bank is offering the shares to investors at a price of A$118 to A$123.5 each, and has already received enough demand to cover the book, two people familiar with the deal told Reuters.
The share placement is not underwritten, indicating the bank’s expectation of strong demand. The book-build process closes late on Wednesday, the people said, declining to be identified because the information is private.
Macquarie declined to comment on demand or the price range.
The placement will be followed by a share purchase plan for existing shareholders, the Sydney-based investment bank said.
“The raising is intended to ensure that we are well placed to continue to respond to opportunities that are meeting our return benchmarks,” chief executive officer Shemara Wikramanayake told investors at a briefing following the announcement.
She added the money raised “should be enough” to deal with a strong pipeline of investment opportunities across the company.
“We are not expecting to be coming back for capital following this,” Ms Wikramanayake said.
The raising follows recent strong capital investment and the expected deployment of more cash, as well as the requirement of an extra A$600 million in capital at its trading division due to its derivative exposure, the bank said.
It said it had recently invested in renewable energy projects in Norway and Britain.
At its annual investor meeting, Macquarie said it had about A$5 billion of excess capital, after it reported record earnings driven by asset sales and double-digit profit from its trading and investments units.
“We are surprised by today’s capital raising, despite the A$1.6 billion of capital investment opportunities that management has today highlighted are currently on offer for its various divisions,” Goldman Sachs analysts said in a note to clients.
“That said, management has a very good track record in effectively deploying its marginal capital, and so we remain comfortable with today’s decision to raise capital.”
Goldman Sachs analysts estimated the share plan would raise an extra A$300 million to A$600 million.
Macquarie also said on Wednesday it expected a 10 per cent rise in first-half profit, broadly in line with its previous forecasts.
It still expects its annual result to be slightly down on last year.
Ms Wikramanayake, who took over the top job at Macquarie late last year, previously told analysts that favourable conditions were unlikely to be repeated in full year 2020, without elaborating.