AFGT annoucements capital raising to support liquidity

Not for release to US wire services or distribution to the US Market and Media release 10th June 2020 AFT Pharmaceuticals announces capital raising to support liquidity and optimise capital structure AFT Pharmaceuticals (NZX:AFT, ASX:AFP) (AFT, the Company), Atkinson Family Trust (AF Trust) and CRG today announce a capital raising to increase liquidity and reduce debt. Placement AFT is undertaking an underwritten placement, comprised of: o a primary placement to raise approximately NZ$10 million by issue of new shares in AFT; and o a secondary sale of: o approximately NZ$3.5 million worth of shares by AF Trust; and o approximately 16 million existing shares by CRG, (together, the Placement). The Placement will be followed by a non-underwritten Share Purchase Plan (SPP) of up to approximately NZ$2 million (together with the Placement, the Capital Raising). The equity raised by the issue of new shares under the Placement and SPP will be applied to retire one of AFT's working capital facilities, improve free cash flow and provide more flexibility to fund future anticipated growth. The retirement of the working capital facility is expected to reduce annual interest costs by ~NZ$0.85 million per annum and reduce FY20 pro forma net debt from NZ$37.1 million to NZ$25.1 million (1.5x expected FY21 EBITDA ) before transaction costs. The AF Trust is the investment vehicle associated with AFT's founders, Hartley and Marree Atkinson. The AF Trust has not sold any shares since AFT's IPO in 2015 and is selling approximately ~NZ$3.5 million worth of shares in response to investor interest which represents approximately 1.3% of its current holding . AF Trust will remain the largest shareholder post transaction with approximately 69% and has no current intention to sell further shares . CRG is selling approximately 16 million shares, which represents 100% of its holding in AFT. To enable CRG to sell its entire holding, AFT has agreed to remove the 12 month selling restriction currently in place in respect of 468,030 shares held by CRG . CRG has been a supportive shareholder since 2014, however, the fund in which the AFT investment is held has now transitioned out of its investment phase and CRG is returning capital to investors. AFT would like to thank CRG for their longstanding support of the Company. The Capital Raising is expected to substantially increase free float of AFT from approximately 11% to 31% and is expected to provide a corresponding increase to trading liquidity4. The Placement is underwritten by Bell Potter Securities Limited and Forsyth Barr Group Limited at a floor price of NZ$3.65, which represents a 22.3% discount to the last closing price of NZ$4.70 on Tuesday 9th June 2020. The final price of the Placement (Placement Price) will be determined today via a bookbuild. Share Purchase Plan AFT is seeking to raise up to approximately NZ$2 million through a non-underwritten SPP to eligible shareholders. Under the SPP, holders of existing AFT shares on the share register at 7pm (New Zealand time) on the record date of Tuesday 9th June 2020, and who are eligible shareholders in New Zealand and Australia, will be invited to subscribe for up to NZ$50,000 of new fully paid ordinary shares in AFT. The SPP price will be the same as the Placement Price. Further information in relation to the SPP, including the SPP terms and conditions, will be outlined in a separate SPP offer document which will be despatched to eligible shareholders. Indicative timetable Placement Date Announcement, trading halt and bookbuild Wednesday 10th June Trading halt lifted Thursday 11th June Settlement date Monday 15th June Allotment and trading of new shares on ASX and NZX Monday 15th June Share Purchase Plan Record date 7pm NZT, Tuesday 9th June Dispatch of offer document and application form Monday 15th June Share Purchase Plan opens Monday 15th June Share Purchase Plan closes Friday 26th June Allotment of shares Thursday 2nd July Commencement of trading of shares on NZX Thursday 2nd July Commencement of trading of shares on ASX Friday 3rd July For more information about the Capital Raising please refer to the investor presentation released today on the NZX and ASX. - Released for and on behalf of AFT Pharmaceuticals limited by Chief Financial Officer Malcolm Tubby For more information Investors Media Dr Hartley Atkinson Richard Inder Managing Director The Project AFT Pharmaceuticals +64 21 645 643 Tel: +64 9 488 0232 About AFT Pharmaceuticals AFT is a growing multinational pharmaceutical company that develops, markets and distributes a broad portfolio of pharmaceutical products across a wide range of therapeutic categories which are distributed across all major pharmaceutical distribution channels: over the counter (OTC), prescription and hospital. Our product portfolio comprises both proprietary and in-licensed products, and includes patented, branded and generic drugs. Our business model is to develop and in-license products for sale by our own dedicated sales teams in our home markets of Australia and New Zealand and in certain Southeast Asian markets, and to out-license our products to local licensees and distributors to the rest of the world. Not for release or distribution in the United States This announcement has been prepared for publication in New Zealand and Australia and may not be released to US wire services or distributed in the United States. This announcement does not constitute an offer of securities for sale in the United States or any other jurisdiction. Any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933 or an exemption from registration. End CA:00354424 For:AFT Type:OFFER Time:2020-06-10 10:00:32