Nuplex plans 1-for-4 share consolidation

Nuplex plans 1-for-4 share consolidation after capital raising

June 2 - Nuplex Industries, whose stock has more-than doubled since reaching a record low in March, plans a one-for-four consolidation to pare back a register bloated by its capital raising in April.

Shares on issue will reduce to about 189.8 million after the consolidation from 759 million currently, the company said in a statement. The number of shares outstanding has soared from just 81.7 million a year ago after the specialty chemicals maker was forced to sell stock at a deep discount to repay debt and restore its balance sheet.

The reduction will reduce the number of shares to a level which is “more appropriate for a company with Nuplex’s current market capitalization,” chairman Rob Aitken said.

Shares of Nuplex fell 6.5% to 43 cents today, giving the company a market value of NZ$349 million. The shares are rated a ‘hold,’ based on recommendations of five analysts compiled by Reuters.

Nuplex is still the worst performing company on the NZX 50 Index this year, having tumbled 59%. Last month, managing director John Hirst reiterated the company’s forecast for a decline in annual earnings forecast while noting signs of recovery in some markets.

Annual earnings before interest, tax, depreciation and amortization is expected to fall 29% to NZ$87 million from NZ$122 million in 2008. Second-half EBITDA will be “at least in line” with the first half of 2009, Hirst said last month.

Nuplex hasn’t recovered as much ground as Fisher & Paykel Appliances, which is also selling shares at a discount to repay debt. FPA was earlier down more than 60% this year but has pared its slide to 19% after agreeing to sell a 20% stake to Haier as part of its refinancing plans.

Nuplex turned to investors to bolster its balance sheet after the value of foreign debt surged with the New Zealand dollar’s decline. Since then the kiwi dollar has clawed back some ground and was recently at 64.82 U.S. cents having sunk to as low as 49 cents in March.

The consolidation will take effect from June 17.

(Businesswire)