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Nuplex - Source: Nuplex -
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Troubled resins manufacturer Nuplex is on a watching brief as it continues to try and raise its $110 million lifeline.
The company on Wednesday extended a trading halt put in place at the start of the week while it carried out a share placement to pay down debt.
The placement is part of an agreement with Nuplex's banks who have agreed to waive debt covenants if the company pays down a third of their debt.
Ian Witters from MacQuarie Private Wealth understands that on Wednesday night the company had not raised the required amount of money.
He says Nuplex was trying to raise around $60 million from institutional investors through shares at 60-65 cents.
But Witters says institutions have rejected that price and it appears the price is now down around 50 cents or even below that, and may go even further.
"At the moment for this company, they need the money and must get it and we're just in a waiting phase to see what is happening," he says.
Witters has echoed comments made by other market analysts that the share placement will dramatically dilute existing shares.
"If it's done at around the 50 cents (mark), it probably means it's around two new shares for every dollar that's held," he says.
The share placement was first being offered to institutional investors before a rights issue to existing shareholders.
The trading halt is expected to be lifted at the end of business on Thursday.
At the close of the markets last Friday, Nuplex shares ended at $1.07.
