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Nuplex - Source: Nuplex -
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A trading halt placed on resins manufacturer and distributor Nuplex has been extended to allow the company to finalise its capital raising process.
Nuplex originally requested a trading halt from Monday 10am to Wednesday 10am to undertake a share placement process designed to raise $110 million to pay down debt.
The halt has been extended to the close of business on Thursday.
"I'm not sure this bodes well for the capital raising process. Unfortunately it tends to indicate...that they're struggling to make the placement to raise the capital that they require," says ABN Amro Craigs market analyst Jennie Moreton.
Moreton says the delay could be about the price Nuplex was hoping to place the shares.
As part of its agreement with its banks Nuplex is aiming to raise capital via a placement of shares to institutional investors, and then a rights issue of shares to existing shareholders.
"The norm has been that they make a placement with the institutional investors and then go back to the existing shareholders at the same kind of price level but there is some discussion around Nuplex that they may go back to the existing shareholders at a lower price, and that's not going to make the institutions very happy," says Moreton.
Nuplex on Monday said it had reached an agreement with its banks amending the company's senior debt ratio covenant following news in February that it had breached its debt covenant.
The company's shares have plunged 65% since the beginning of this year and closed on Friday at $NZ1.07.
