Waning interest in the Joint Strike Fighter story has resulted in Quickstep Holdings' biggest shareholder nudging the 20 per cent takeover threshold after a capital raising fell well short.
Washington H Soul Pattinson & Co's stake in the advanced composites manufacturer has reached 19.6 per cent after it spent the maximum $5 million making up a shortfall in an effort to fund new manufacturing facilities in Sydney.
The investment company had agreed to act as a subunderwriter to the entitlement as long as its interest in Quickstep did not exceed 19.9 per cent.
Other shareholders stumped up only about $1.8 million at 16¢ a share in the $7.5 million capital raising, which had a maximum target of $10.4 million. Quickstep described it as a positive result in difficult market.
The company is on the verge of commissioning its new facility near Bankstown Airport to service a 20-year agreement with US defence manufacturer Northgrup Grumman Corp to supply components for the F-35 Joint Strike Fighter Program. The deal is potentially worth up to $700 million.
But the estimated $385 billion program to produce a new generation fighter jet for the US and its allies has suffered technical hitches and cost overruns.
The capital raising was the second time in 10 months Quickstep had sought help from investors to finance the new facility. Last April, it secured $17.3 million from a convertible notes issue and placement in which Washington H Soul Pattinson was also involved.
The move from Perth along with Quickstep's headquarters has also benefited from NSW Government enticements, which dealt a blow to WA's status as a base for high-tech manufacturing when it was revealed early last year.
Quickstep shares closed yesterday at 17¢, valuing it at $54.9 million. The shares hit a high of 54¢ last year and 98¢ in 2007.