Funtastic Limited (ASX:FUN) says it will raise up to $24.6 million to reduce bank debt, improve gearing ratios and insulate the business from economic shocks.
The toy manufacturer says the capital raising will consist of new Funtastic ordinary shares at an offer price of $0.145 per new share, a 9.4 per cent discount on its last closing price.
Funtastic has also confirmed it expects to generate a net profit of $10.4 million in fiscal 2012, rebounding from a loss of $38.2 million last year.
Managing Director Stewart Downs says the company’s forecast growth is not dependent on an Australian retail turnaround but the board felt it was prudent to strengthen the company's balance sheet.
Shares in Funtastic last traded at $0.16 before entering a trading halt yesterday to conduct the first stage of the offer.
In the first half of the 2012 financial year Funtastic reported a net profit of $5.5 million.