Pyne Gould raises $30M in placement, bringing total raised to $267M

Thursday 22nd October 2009

Pyne Gould Corp., the finance company with ambitions to become a bank and asset manager, raised $30 million through a placement to institutions, bringing its total capital raising to $267 million.

Institutions, so-called habitual investors and some sub-underwriters of its earlier rights offer will buy 68.6 million shares at 43 cents apiece. Pyne Family Holdings, which is associated with director George Kerr, will buy 1 million shares at 49 cents each, the company said in a statement. The shares last traded at 46 cents before being halted.

The amount raised in the placement was at the top end of the $15 million top $30 million sought and chairman Sam Maling said the response was “a strong endorsement of PGC and its strategy.”

Demand for the shares was also swelled by the strong level of take-up under the company’s rights offer, he said. The stocks will resume trading tomorrow.

Shareholders subscribed for 524.9 million new shares in the earlier rights offer, raising $210 million and representing a take-up of about 88.7%. Some 66.6 million shares, a shortfall of $27 million, or 11.3%, was taken up by underwriters First NZ Capital. Investors could buy six new shares for each one held at 40 cents apiece.

The Christchurch-based company underwent the capital raising as part of the reorganization of its balance sheet. The company’s plans to turn its finance unit Marac into a bank hit some wobbles when Standard & Poor’s downgraded the company’s credit rating below investment grade to BB+.

The Reserve Bank requires banks to have an investment grade rating of BBB- or better. Under the shuffle, Pyne Gould took $175 million of impaired loans from Marac’s books, taking an $85 million charge, with the remainder going into the Perpetual unit.

Businesswire.co.nz

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