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Nuplex - Source: Nuplex -
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Chemicals manufacturer Nuplex Industries rights offer was undersubscribed by 4.09%, or $5.4 million, which would be taken up by underwriters First NZ Capital and sub-underwriters.
The $132.8 million pro-rata renounceable rights issue to existing shareholders closed on Monday, and the company on Tuesday said it was pleased with the take-up.
"It was essential we had the offer underwritten to provide the certainty for all shareholders that the offer would be fully subscribed, thereby raising sufficient funds to restore our debt to more comfortable levels," Nuplex chairman Rob Aitken said.
The amount raised was proportionally large, about one-and-a-half times the company's market value prior to the announcement of the rights issue.
Shareholders were offered seven new shares for every one existing share, at an issue price of 23c a share. The new shares will be issued on Thursday.
Nuplex shares were trading at 37 cents, down 4 cents or nearly 10%, early on Tuesday afternoon.
First NZ Capital had four business days from Thursday to exercise an option requiring Nuplex to allocate up to 99 million new shares to sub-underwriters, a broad range of institutional and habitual investors.
The underwriter's call option attracted some criticism, but Nuplex said previously that First NZ Capital did not earn an underwriter's fee on shares placed under the call option agreement and would not benefit.
The option ensured that institutions had some certainty over the shares available to them, as under the rights issue it depended on the level of rights taken up by shareholders.
Proceeds from the issue would reduce Nuplex's bank debt to about $280 million, and lower the company's gearing ratio and interest costs.
Nuplex was stung by depreciation in the New Zealand dollar, which saw its foreign currency bank debt increase to $371 million at the end of 2008. At the end of February this year, it increased to $400 million.
The funds raised would also be enough to meet Nuplex's medium-term capital needs.
