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Wednesday 28th March 2012 |
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Mercer Group boss Rodger Shepherd, who is tasked with restructuring the unprofitable stainless steel fabricator, wants to exercise his first tranche of options early and will put it to shareholders at a special meeting.
Chief executive Shepherd wants to exercise an option to buy 18.2 million shares at 5.5 cents apiece totalling about $1 million as soon as possible rather than wait until Feb. 2 next year when they become available, the company said in a statement.
“The directors consider that it would be in Mercer Group's best interests for the Series A options to be exercised as soon as possible because this would mean that Mercer Group would receive the share subscription price payable under the Series A options sooner than would otherwise be the case,” the company said.
Shepherd’s second option tranche, where he can buy 14.3 million shares at 7 cents apiece, or $1 million, becomes available on Feb. 2, 2014, with an option of a further 11.8 million shares at 8.5 cents each, or $1 million, on the same date a year later.
Combined with three annual share issues equivalent to 1 percent of the company’s stock, Shepherd stands to take a 19 percent stake in Mercer.
The shares climbed 2 cents, or 33 percent, to 8 cents in trading today, valuing the company at $17.5 million. The stock plunged from about 36 cents in 2008, and was further punished when it halted repayments to South Canterbury Finance, when the late Allan Hubbard was a cornerstone shareholder, after breaching its banking covenant.
Shepherd is a former deputy chief of Fairfax New Zealand and PMP chief who took the Mercer role in August after a strategic review of the business opened the door for former CEO Howard Milliner to leave.
He has been tasked with turning the company around. Mercer reported positive underlying earnings of $500,000 in the six months ended Dec. 31, turning around an underlying loss of $800,000 a year earlier. The company made a net loss of $1.1 million in the period, narrowing the first-half deficit of $1.6 million a year earlier.
BusinessDesk.co.nz
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