Friday 1st April 2016 |
Text too small? |
Tegel Group Holdings, the poultry group controlled by private equity firm Affinity Equity Partners, wants to raise as much as $344.4 million in New Zealand's first initial public offering of the year for the NZX mainboard.
The Auckland-based company plans to sell between 137.5 million and 192.4 million shares at $1.50-to-$2.50 apiece, according to its product disclosure statement. The gross proceeds of the IPO would raise between $299.1 million and $344.4 million, of which $131.9 million will be set aside to repay bank debt and between $129.6 million and $163 million will pay out existing holders of Tegel's redeemable shares. The remaining $22.5 million to $25.3 million will cover IPO costs, including an $8 million bonus for senior management.
Tegel is forecasting profit of $10 million on sales of $581.1 million in the year ending April 24, rising to a profit of $44 million on revenue of $637 million the following year, when it intends to pay a dividend of between 7 and 11 cents per share. That implies a gross dividend yield of 6.2 percent to 7.1 percent.
Affinity intends to reduce its 87 percent stake to 45 percent after the offer, at least half of which will remain tied up in escrow arrangements until it announces its 2017 results. The private equity firm will be allowed to sell up to 50 percent of its remaining stake before then if Tegel's shares spend 10 straight trading days at least 20 percent higher than the offer price, once the first-half results are posted.
Tegel will be the first IPO of the year after a sluggish 2015, which saw a number of sales deferred in turbulent financial markets. While private equity owners have attracted scepticism after the failure of consumer electronics store Dick Smith Holdings, investors have been more optimistic about the potential fortunes for Tegel.
The company expects poultry sale volumes to rise to 92,814 tonnes by the 2017 year, of which 16,705 tonnes will be exports. That compares with 80,273 tonnes sold in 2015, including 13,125 tonnes of exported product.
In a letter to investors, chairman James Ogden said Tegel plans to focus on new product developments to increase the value and volume of poultry sold, expand value-added production, develop new sales channels, and enter new export markets.
(BusinessDesk)
BusinessDesk.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes