DUETS entitlement offer
Justin Baiocchi | 24/04/2009 9:01:30 AM
Diversified Utility and Energy Trust (ASX code DUE) recently announced their intention to raise up to $264m in equity at a price of $1.30, which was a 24% discount to the price of DUE at the time. The company will use the proceeds from the capital raising to pay down debt as it enters into negotiations with banks regarding the refinancing of a number of existing loans. We consider that this is a prudent move by DUE and offers existing investors an opportunity to increase their shareholding at a significant discount to current DCF valuations of DUE (UBS estimate of $2.20). Where appropriate we will accept the offer for client portfolios, which is based on an entitlement of 1 new share for every existing 6.25 shares.
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