On Breakingviews - Australia Inc reruns its crisis capital playbook, writes jgfarb:
The country’s third-largest bank joins a growing list of Australian companies rushing to issue new shares even as profit fell and it slashed the dividend. Despite growing Covid-19-related provisions, however, there was no obvious cause for alarm. NAB’s common equity Tier 1 capital ratio stands at 10.4%, rising to a sounder 11.2% following the placement and share sale.
As has been the case for many of Australia’s capital calls over the last month, big funds will be outsized participants in NAB’s. Retail investors, who represent around half the shareholder register, can only subscribe to 14% of the total raised and may be diluted further by purchase caps that will limit any upside. The median share price gain for the recent crop of local issuers through Friday has been over 13%, according to governance advisory firm Ownership Matters.
Such disparities have been more glaring beyond NAB. Data centre operator NextDC, for example, recently took advantage of new guidelines to help troubled companies raise more money quickly. A discounted placement for a maximum allowable 25% of its shares was announced when the stock was already at an all-time high, and the proceeds are largely earmarked for growth initiatives.
Australia will suffer coronavirus-related costs, even though it has done a comparatively better job containing the disease so far. More listed companies are therefore bound to issue new equity. They raised nearly A$100 billion during the financial crisis; Ownership Matters puts the tally so far at a little more than one-tenth as much. It is unfortunate, however, that a market designed to raise capital efficiently is being abused to disproportionately favour a few.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
As Coronavirus Cases Climbed, Private-Equity-Owned Hospital Faced ClosureA playbook that often includes loading portfolio companies with debt, selling assets and sometimes shutting hospitals is adding to the strains of health-care systems as they battle the coronavirus pandemic.
Leer más »
Cinemex Files Chapter 11, Asks Studios, Landlords For “Industry Rebalancing”Cinemex Holdings USA, Inc. and Cinemex USA Real Estate Holdings, Inc. have filed for bankruptcy protection and reorganization under Chapter 11 of the US Bankruptcy Code in Miami, Florida, where it …
Leer más »
Four Numbers That Show How Coronavirus Is Dramatically Reshaping Retail As We Know ItGap Inc. has burned through $1 billion in cash.
Leer más »
Four Numbers That Show How Coronavirus Is Dramatically Reshaping Retail As We Know ItHere are 4 numbers that show how the coronavirus is dramatically reshaping retail as we know it: by theothersarahh
Leer más »
What Does Quarantine Life Look Like In Your Home? We Want To Hear From You.HuffPost wants to hear your stories about how you’re coping during the coronavirus crisis.
Leer más »