Decmil plummets 50pc on $50m cap raise, says better fortunes await
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It’s been a tough few months for Decmil (ASX:DCG) but the infrastructure company promises shareholders better times are ahead.
It blamed it on two particularly troublesome clients that weren’t paying.
First, the Sunraysia solar project in NSW, where owners withheld progress payments due to delays in the project obtaining R1 registration.
Second, the New Zealand Department of Correction, which abruptly terminated a contract with them in March.
In the last six months Decmil has plunged from over 90 cents on December 2, to under 10 cents this morning.
But the company is seeking to put the past behind it, undertaking a capital raising of up to $50 million.
Of this, $30 million is banked as institutional offer while the remaining $20 million is anticipated from a retail offer over the next week.
Commenting on the completion of the institutional component, Dique said,” This is a strong endorsement of the company’s business turnaround strategy and the opportunity presented by the expected significant infrastructure spending in Australia over the next few years.”
“We will now have the balance sheet to ensure we are well positioned to capitalise on this new opportunity.”
CEO Dickie Dique expects more work will come from post-COVID 19 stimulus implemented by governments.
Federal and state governments around Australia are gradually announcing infrastructure projects to reboot their economies.
Decmil reminded investors it had $411 million of contracted work in hand as of March 31 across 15 contracts. 63 per cent of the former figure was with Australian government customers.