Widespread Portfolios plans 1-50 consolidation to boost stock

Jonathan Underhill

Monday 23rd June 2008

Widespread Portfolios Ltd., an investment group in mining ventures, plans a one-for-50 share consolidation to narrow the gap between its market price and the value of assets.

Shares of Widespread recently fell 7.7% to 1.2 cents while the company's NTA is 1.62 cents, according to its website. At recent broker presentations, the company was told its ballooning shares on issue, at more than one billion, was keeping the stock price low and deterring investment.

After the reduction, shares on issue will reduce to 20 million, theoretically worth 65 cents apiece, managing director Chris Castle said in an interview.

"I'm not comfortable that there's an ever-increasing gap between net assets and share price," Castle said. "It makes us vulnerable to a takeover."

Widespread stock listed in 2003 after the reverse takeover of NZIJ.co.nz Ltd, a shell company with no assets. It hasn't exceeded 4 cents in trading since then. The consolidation may make the stock more attractive to institutional investors, the company said. Currently, about 50% of the stock is owned by 10 individuals, mainly long-term friends of Castle, he said.

Widespread pursues an "aggressive and inherently risky" investment strategy, seeking high-growth opportunities in the mining industry, mainly overseas, according to the company's Website. The company raised NZ$524,000 in an offer to existing holders that closed last Friday and doesn't have immediate plans to raise more capital.

Its biggest investments are a 7.2% stake in Toronto-listed Asian Mineral Resources, which is developing a nickel mine in Vietnam, and 11% of King Solomon Mines Ltd, an ASX listed explorer for minerals in China.

The record date for the consolidation is July 7 and will take effect on July 8.

(businesswire.co.nz)

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