Force rights await underwriter

By Phil Boeyen, ShareChat Business News Editor

Thursday 21st February 2002

More than 75% of the rights in Force Corp's (NZSE: FOR) current capital raising have been left on the shelf although most of those were tagged for majority owner Sky City (NZSE: SKC), which is set to underwrite the issue.

Force has been seeking $31 million through an issue of Mandatory Convertible Notes and says when the issue closed last Friday 23.2% of the rights had been taken up leaving a shortfall of around 23.78 million notes.

"SkyCity Investments Limited had not subscribed for its entitlement as at that date, its entitlement being approximately 15.5 million MCNs," Force says.

"We are advised that Sky City will, subject to the conditions of the underwriting agreement being met, take up its MCN entitlement and underwriting commitment at the date of allotment."

Excluding the Sky City entitlement means that other shareholders applied for around 46.6% of the MCNs on offer.

Force says it has been granted a waiver from the Market Surveillance Panel allowing it to undertake the allotment of MCNs by no later than 5pm on March 1 rather than within five business days of the closing date.

"As earlier advised, settlement of the issue and allotment of the MCNs will depend on the completion of documentation for the Argentina funding facility. Contemporaneous settlement of the issue is a condition precedent for the banking arrangements for Force with ANZ Bank."

Under the terms of Sky City's underwriting agreement the funding documents covering the debt facilities for Force and for Village Cinemas SA (Argentina) must be completed before the underwriting goes ahead. Those documents are not expected to be sorted out until the middle of next week.

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