Nuplex goes from woe to go; investors pay more for top-up shares

Friday 24th April 2009

Nuplex Industries, the worst-performing stock on the NZX 50 Index this year, has dug itself out of balance sheet hell with investors agreeing to pay more under the top-up option in its capital raising plan.

The specialty chemicals maker raised an additional $26.7 million, bringing the total to $159.5 million, after arranger First NZ Capital used a call option to place the equivalent of 15% of Nuplex's stock with sub-underwriters.

The price was bumped up to 27 cents a share from 23 cents. Shares of Nuplex gained 6.1% to 35 cents when they resumed trading.

"We're delighted, managing director John Hirst said in an interview. We were in pretty good shape before but perhaps not with appropriate gearing. Now we've got a very conservative balance sheet."

First NZ Capital exercised the call option in full, with an additional 99,024,640 new ordinary shares to be issued in a placement to be completed on April 29. Among stocks on the NZX 50, only F&P Appliances has fallen as much this year, tumbling 67%.

The appliance manufacturer is in talks to refinance an $80 million short-term loan-facility coming due on April 30 having gained a waiver for breaching lending covenants.

Nuplex turned to investors to bolster its balance sheet after the value of foreign debt surged with the New Zealand dollar's decline. At the same time, earnings fell in the first half of the 2009 business year, reflecting the global economic downturn.

Hirst said First NZ Capital 'needs to be applauded' for taking the initiative and driving the top-up price higher. The improved gearing means Nuplex could now consider takeover prospects in the battered global markets though it doesn't currently have a target.

"There are difficult trading conditions out there for everybody at the moment," Hirst said. "It's nice to have the pressure off from a balance sheet perspective."

Businesswire.co.nz

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