Trilogy International's majority shareholder The Business Bakery is selling part of its stake for $30million, while Trilogy plans to raise up to $25million through a placement, including $5million from a share purchase plan.
The $50million capital raising is fully underwritten, but the $5million purchase plan is not.
Trilogy's $20million to $25million proceeds are to be used to pay off debt, fund long-term brand and market development and look at acquisition opportunities.
Trilogy will raise $20million through the placement and The Business Bakery will sell $30million of its shares, at $3.70 per share, a 7.5% discount on Wednesday's closing price.
The Business Bakery, whose shareholders include Trilogy chairman Geoff Ross, at present has a 48.7% stake in Trilogy, will benefit from Trilogy's shares having gained 325% in value during the past year, rising from 93c to $4.
The Business Bakery intends to retain an "at least 30%'' stake in Trilogy.
Craigs Investment Partners broker Peter McIntyre said he "was not surprised'' Business Bakery was selling part of its stake, from about 48.63% down to 35.5%, given the share price had risen 325% during the past year, and 455% the previous year.
"It was always an option for Business Bakery to take out funds when the share price has done so well ... but they're keeping a big stake,'' he said of the 35.5% retained.
Trilogy's interests include natural products, home fragrance brands, cosmetics, skincare and haircare products.
"They're one of the NZX's best performers and have done exceptionally well,'' Mr McIntyre said.
Trilogy said in a statement yesterday the capital raising would materially increase its free float to around 70%, which would be expected to provide increased liquidity to benefit all shareholders.
Trilogy chief executive Angela Buglass also announced yesterday its intention to list on the ASX and expects to start trading on the Australian exchange during the second half of this year.
"Given the substantial size of the Australian market and our growing brand presence, Australia is the largest near-term opportunity for our business,'' she said in a statement.
Last month Trilogy reported that full-year profit more than doubled on soaring sales of its skincare and home fragrance products and the contribution from cosmetics and fragrance distributor CS Company, BusinessDesk reported.
Trilogy funded the CS acquisition with bank debt and had drawn down $34.8million of its $55million facility as at March 31.
The company's finance costs rose to $1.8million in the year from $391,000 in 2015.
