18 Sept 2019capital raising announcement● NeutralMajor
Contango raised money in two ways: a public offering of 44,736,842 common shares plus 6,710,526 more bought by underwriters (net about $46.13 million), and a $7.5 million private sale of 789,474 Series A preferred shares to entities tied to director John C. Goff. The preferred shares convert automatically to common once more shares are authorized and shareholders approve. The proceeds are meant mainly for the cash due on a pending acquisition, with the rest going to repay revolver debt or short-term investments. Contango also signed a new JPMorgan-led revolving credit facility with a $65 million borrowing base maturing September 17, 2024, which resolves the October 2019 maturity of the old RBC facility. The large share issuance dilutes existing holders.