Legend looks to raise $5.75 million

Legend looks to raise $5.75 million

Funds will go towards paying off bank debt, restructuring and funding growth

ASX-listed Legend Corporation (ASX: LGD) aims to raise $5.75 million through a Share Purchase Plan (SPP) and placement to investors.

According to a statement posted on the ASX, the raised funds will be used to reduce the company's bank debt, support the business' restructuring program and fund operations growth.

Legend CEO, Bradley Dowe, said it was focused on debt reduction but still wanted to see growth in the existing business. In February, Legend announced it was cutting production of its heritage memory and computer component lines due to flagging revenues. It also announced restructuring plans to rationalise its local operations.

"Like many small companies at the moment, the share market has been a very rocky ride since January," Dowe said.

Through the SSP, the hardware manufacturer and distributor will offer shareholders the chance to subscribe for up to $5000 worth of shares at an issue price of $0.08 per share. This offering will be available until June 13.

Legend intends to raise about $2.5 million under the SSP and $3.25 million through the share placement.

Dowe said the company has also upgraded its full-year performance forecast. Earlier this year, Legend announced it will not be able to meet its full-year guidance figures due to invoicing delays and slow sales. It originally forecast full-year EBIT result to June 30 would range from $12.1 to $14.7 million.

"We're proceeding very strongly with our restructure and the business is outperforming the original advice," Dowe said.

In other news, Dowe said the company was moving into larger facilities in the Sydney suburb of Seven Hills next month.

"The new purpose-built facility is about four times larger than what we've had in the past," he said. "It will improve the service levels to our customers as well as allow us to provide extra product lines."

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