Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Scott Technology buys majority stake in magnet maker

Scott Technology buys majority stake in magnet maker, flags rights issue

By Paul McBeth

March 31 (BusinessDesk) – Scott Technology Ltd. has bought a controlling stake in electromagnet manufacturer HTS-110 Ltd., and said it’s looking at a rights issue to help fund the deal.

The Dunedin-based manufacturer will pay $4.4 million for almost 51% of HTS-110 of Wellington, with the expectation the target will play a key role in developing a New Zealand high temperature superconductor industry. Superconducting technology enables the transmission of electricity without resistance or the loss of energy.

Scott Technology will take on debt to pay for the purchase then raise money in a rights issue to cover the loan, it said in a statement today. The terms of a rights issue are still being developed, but are likely to be one tradable right for three shares, with the issue ending in June. A prospectus is expected to be distributed at the end of May. The strike price would be at a discount to Scott Technology’s shares, which last traded at $1.42 on March 25.

“Scott expects HTS-110 to be both earnings and cash-flow positive from the date of acquisition,” managing director Chris Hopkins said in a statement. “Revenues and earnings are expected to grow significantly in the medium- to long-term as the product range moves through to full commercialisation.”

Last week, Scott Technology lifted its first-half earnings 61% to $1.6 million, and indicated more growth was likely in the second half with forward work sitting at record levels.

Any excess capital raised will be will be used to repay earlier borrowings for other acquisitions, and enable further expansion.

Industrial Research Ltd. and American Superconductor Corp. will keep minority shareholdings in HTS-110, while Endeavour Capital, the fund manager for the government’s Venture Investment Funds, sold its stake to Scott.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Petya: New Ransomware Campaign Hits Worldwide

A new ransomware campaign known as Petya is affecting computer networks using Microsoft Windows. It was first seen affecting systems in the Ukraine, but is quickly spreading across other computer networks in Europe. More>>


Skodafone Goneski: Sky TV, Vodafone Drop $3.44 Billion Merger Plan

Sky Network Television and Vodafone New Zealand have terminated their merger agreement which aimed to create the country's largest telecommunications and media group, and have withdrawn an appeal against the Commerce Commission's rejection of the plan. More>>

Quake Insurance: Reforms To EQC Act Announced

· Increasing the monetary cap from $100,000 (plus GST) to $150,000 (plus GST) for EQC building cover.
· Clarifying EQC land cover is for natural disaster damage that directly affects the insured residence or access to it... More>>


Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

Global economic growth has increased and become more broad-based. However, major challenges remain with on-going surplus capacity and extensive political uncertainty... More>>