Mayfield Childcare launches $3.02 million entitlement offer to strengthen balance sheet and support operations

Mayfield Childcare Limited (ASX: MFD) has launched a pro-rata, non-renounceable entitlement offer seeking to raise up to $3.02 million, as the early childhood education and care provider moves to strengthen its balance sheet, improve liquidity and support ongoing operations across its centre network. 

The offer, detailed in a prospectus lodged with ASIC on 3 August 2026, gives eligible shareholders the opportunity to subscribe for two new shares for every five shares held at an issue price of $0.10 per share. If fully subscribed, approximately 30.17 million new shares will be issued, raising up to $3,016,984 before costs. 

The company notes that the securities offered under the prospectus "should be considered as speculative" and encourages investors to read the document in full and seek appropriate professional advice before making an investment decision. 

The entitlement offer has secured significant support from existing shareholders, with $2.28 million already committed through pre-commitments from major investors.

Embark Early Education Limited, Mayfield's largest shareholder, has committed $1.50 million to take up its full entitlement, while Malcolm & June Ross Investments Pty Ltd has committed $577,873, including participation in the Top-Up Offer. Investor Amresh Sharma has also committed $200,000 through a combination of his entitlement and additional Top-Up shares. Together, these commitments account for approximately 22.8 million shares under the offer. 

The remaining $736,530 of the raising is partially underwritten by Canaccord Genuity (Australia) Limited, which has also been appointed lead manager to the offer. 

Embark, which currently holds 49.8 per cent of Mayfield's issued capital, has confirmed it will subscribe only for its entitlement and will not participate in the Top-Up or Shortfall Offers. If the entitlement offer is fully subscribed, its ownership stake will remain unchanged. 

Mayfield intends to allocate approximately 92 per cent of the funds raised, around $2.76 million, towards working capital, with the remaining 8 per cent covering the costs of the capital raising. 

According to the prospectus, working capital will support:

• Corporate and administrative expenses
• Marketing and enrolment initiatives designed to improve occupancy
• Regulatory compliance activities, including child safety and workforce compliance requirements
• General operating costs across the company's early learning centres. 

The company said the entitlement offer forms part of its ongoing capital management program and is intended to strengthen its balance sheet, enhance liquidity and provide additional financial flexibility while discussions continue regarding an extension of its existing Westpac banking facility, which is due to mature on 31 August 2026. 

The prospectus identifies several key risks facing the business, including the potential need for additional capital, shareholder dilution for investors who choose not to participate, and the uncertainty surrounding the extension of the company's banking facility. It also notes that shareholders who do not take up their entitlement could see their ownership diluted by approximately 28.57 per cent following completion of the offer. 

The document also references the material uncertainty disclosed in Mayfield's 2025 financial statements regarding the company's ability to continue as a going concern. Directors state they believe successful completion of the entitlement offer will provide sufficient funding to meet the company's current operational and short-term working capital requirements. However, they acknowledge that failure to complete the raising could have a material adverse effect on the company's activities. 

Separately, the prospectus notes that Mayfield has withdrawn its FY26 earnings guidance, citing rising labour costs, occupancy volatility, wage pressures and broader operating conditions. It also advises that any future guidance may be materially lower than previously expected. 

In addition to the standard entitlement offer, eligible shareholders may apply for additional shares through a Top-Up Offer, allowing applications for up to 100 per cent of their entitlement where shares remain available. Any remaining shortfall will then be allocated through a Shortfall Offer, administered by the Board in conjunction with the underwriter and subject to the Corporations Act and ASIC guidance. 

Mayfield's entitlement offer highlights the financial pressures facing some providers as labour costs continue to rise, compliance obligations become increasingly complex and occupancy remains uneven across parts of the sector.

With more than $2.28 million already committed by major shareholders and partial underwriting in place, the capital raising is intended to provide the company with greater financial resilience while supporting day-to-day operations, regulatory obligations and future growth initiatives across its early childhood education and care network. 

Read the full ASX announcement here.