Fletcher adds $20m to capital raising plan

Thursday 30th April 2009

Fletcher Building, New Zealand’s biggest construction company, added $20 million to its capital raising plan by varying the terms of a top-up facility in anticipation of strong demand as its shares rally.

The company is taking advantage of a change in NZSX listing rules allowing 20% of a company’s listed capital to be placed in any 12 month period, from 15% previously, Fletcher said in a statement today. Previously, access to the top-up facility was conditional on its $100 million share purchase plan not being fully subscribed.

Fletcher had planned to raise about $505 million to repay debt and strengthen its balance sheet and completed the institutional placement of $406.5 million at $5.35 a share on April 2.

Since then the shares have surged 12%, reaching $6.57 today. That’s likely to stoke enthusiasm among shareholders to subscribe for $100 million of stock under the share purchase plan at the lower of the placement price or a 3% discount to its trading price over a set period - hence the top-up variation.

“The difference between the share purchase plan and the current price tells you it will be well supported,” Fletcher spokesman Philip King said. “The share purchase plan is travelling well and we expect a flurry in the last few days.”

The SPP and top-up offer close on May 5.

Fletcher is planning to rationalise and streamline manufacturing plants at a cost of up to $145 million, write-off a $50 million US tax benefit related to Formica and take an impairment charge of up to $150 million over some assets, it announced on April 1.

The company reiterated its February forecast for profit before one-time items to be at the lower end of analysts’ estimates at that time, which was between $289 million and $336 million.

Businesswire.co.nz

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