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WAM Leader’s Capital Raise – Who Said the LIC Sector Couldn’t Raise Capital

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WAM Leaders (WLE) announced a pro-rata 1 for 5 non-renounceable Entitlement Offer at an issue price of $1.44/shr, representing an 8.0% discount to the 12 July closing share price of $1.565 per share and equal to WLE’s pre-tax NTA of $1.44 per share as at 30 June 2021. The offer equates to a maximum capital raise of approximately $240m, having the potential to increase total FUM to circa $1.45bn, and making it the sixth largest LIC/LIT (assuming the MLT/WHSP merger proceeds).

This announcement was part of broader announcement of a record operating profit for the FY21 period (on the back of 37% portfolio returns for the period) in addition to a final dividend (ff) of 3.5cps, providing shareholders with a fully franked dividend yield of 4.5% and a grossed up yield2 of 6.4%. RRM also notes The Company recorded a profits reserve of 35.3 cents per share as at 30 June 2021, representing 5.0 years of dividend coverage for shareholders.

Just like PIC, which recently issued a 1 for 1 Bonus Options, it is all about timing. And on that front, RRM suspects this will not be the last capital raise announcement over the next month, or so.