Life Pharmacy plans to raise $9m

Kent Blechynden/Dominion Post

RIGHT GROWTH: Life Pharmacy is planning to raise at least $9 million through a rights issue.

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Life Pharmacy is planning to raise at least $9 million through a rights issue.

The three for two renounceable rights issue of partly paid ordinary shares to all shareholders would be at an offer price of 40c per share, with 20c payable on subscription, and 20c a year after the allotment of the shares, the company said today.

Proceeds from the offer would be used to reduce the company's external bank debt; provide for future growth and working capital in the health, beauty and wellness sector; and invest in future pharmacy growth in this country.

Chairman Liz Coutts said the board believed the company's growth plans were "modestly ambitious".

Managing debt exposure and funding expansion by way of equity was prudent given the macroeconomic environment, she said.

"A capital raising will allow us to gain momentum and put us in a more favourable position to act as and when opportunities arise."

Life Pharmacy owns the Life Pharmacy and Care Chemist brands and holds a 49 percent shareholding in 19 pharmacy companies, representing 22 of the 36 Life Pharmacy and Care Chemist stores.

The company also operates two Life Outlet stores and is franchisor to 10 Care Chemist branded pharmacies operating throughout New Zealand.

Life Pharmacy shares closed on Monday at 44c, down from a year high of 75c last October.

NZPA