Seven Group (ASX:SVW) share price eases on capital raising efforts

The Seven Group share price is in reverse today after the company completed its share purchase plan.

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The Seven Group Holdings Ltd (ASX: SVW) share price is tracking in the red today. This comes after the company announced an update to its share purchase plan (SPP).

During late afternoon trade, the diversified investment company’s shares are being exchanged for $19.90 apiece, down 1.31%.

Let’s take a closer look at Seven Group’s latest news.

What did Seven Group announce?

Investors are pushing the Seven Group share price lower, most likely as a result of the impending share dilution.

According to its release, Seven Group advised it has successfully completed its SPP, raising around $33.14 million. This will result in more than 1.68 million new ordinary shares being issued to participating shareholders.

The price listed is $19.73 per share, which reflects a marginal discount of less than 1% on the Seven Group share price’s current level. However, Seven Group noted from the time of the offer, the SPP is a 2.5% markdown on the volume-weighted average price (VWAP) for the 5 days ending 17 May.

In total, the company received 2,164 valid submissions from shareholders, representing an average amount of $15,314 per application.

The SPP follows a recent $500 million underwritten institutional placement that Seven Group launched last month. With the latest SPP included, the company has raised a total of $533.14 million.

Funds will be used to reduce the outstanding net debt, while restoring strength in its balance sheet to pursue opportunities.

Settlement of the newly created shares is expected to occur on 25 May, with commencement of trading the day after.

Seven Group share price summary

It’s been an interesting year for Seven Group shares, with the Seven Group share price having performed strongly during late 2020. In the past 12 months, the company’s share price has increased close to 30%, however, its year-to-date performance is down 15%.

On valuation grounds, Seven Group commands a market capitalisation of roughly $7.2 billion, with approximately 361 million shares outstanding.

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