Fletcher Building nets $406m

By Paul McBeth

Thursday 2nd April 2009

Fletcher Building, New Zealand's biggest construction company, raised $406.5 million in the first part of its capital raising as it seeks to take advantage of recent gains in its share price.

The company, which plans to raise as much as $505 million, placed 76 million shares at $5.35 per share. It aims to raise a further $100 million by way of a share purchase plan for existing shareholders in New Zealand and Australia, with a top-up of as much as $20 million.

"There has been significant support from existing institutional shareholders and strong interest from a range of additional domestic and international institutional shareholders," said chief executive Jonathan Ling in a statement to the exchange. "The completion of the placement represents a vote of confidence in the company's strategy."

Shares in the construction company fell 2.4% to $6.05 in trading on the NZX 50 index this morning after the trading halt on the New Zealand and Australian stock exchanges was lifted.

Before the trading halt yesterday, its shares had rallied about 23% in the past month on speculation of a boost in Australia's construction industry from government incentives and grants for home owners, while the housing market in the US may have reached its trough.

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