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

 


Next Capital pulls Hirepool IPO on tepid support

Next Capital pulls Hirepool IPO as fund managers baulk at after-market support

By Jonathan Underhill

June 24 (BusinessDesk) - Hirepool's 64 percent owner, Australian private equity firm Next Capital, has abandoned plans to sell shares in a $262 million initial public offering after concern from institutional investors that on market support for shares of the unprofitable equipment rental company wouldn't be strong enough.

Next and fellow shareholders Macquarie Group holds 21 percent. Hunter Powell Investments were to have reduced their combined holdings to between 20 percent to 35 percent of the company in the IPO of up to 120.1 million new shares and 83.5 million existing shares at between $1.10 and $1.50 apiece. Some institutions are understood to have struggled to put even a 90 cent valuation on the stock.

There had been good demand from retail investors but institutional investors weren't confident there would be enough support for the stock after it listed, especially with Next remaining a relatively large shareholder. The IPO would have come amid a swathe of stock sales, including Serko, Gentrack, ikeGPS and Scales Corp, giving investors plenty of choice on where to put their funds.

Existing shareholders are happy to remain owners of Hirepool, given the outlook for the economy and the business.

Hirepool is projecting profits from 2015, after years of losses, having squeezed out costs since buying major rival Hirequip out of receivership last year and using its initial public offering to pay down debt, according to its prospectus.

Hirepool is forecasting a net profit of $25 million for the year ending June 30, 2015, from a pro forma loss of $17.8 million in the current year, according to the company’s prospectus. After adding back finance costs, depreciation and amortisation of Hirepool and Hirequip, pro forma aggregated earnings before interest, tax, depreciation and amortisation are forecast at $34.5 million this year and $60.5 million in 2015.

Hirepool alone has posted net losses each year from 2009, according to the prospectus, mostly reflecting finance costs. Hirequip achieved a profit in 2012 and for the 10 months to May 6 2013, following three years of losses, the figures show.

Following the merger, Hirepool is the nation’s only generalist hire equipment company, although it has only about 19.6 percent of the market based on last year’s application to the Commerce Commission to buy Hirequip. Those figures included an estimate that the building hire industry generated $780 million of equipment hire revenue in 2013, while Hirequip’s revenue was $153 million.

The company had planned to cut interest bearing debt to $85 million on listing from $203.6 million at June 30.

Deutsche Craigs, Macquarie Securities (NZ) and UBS New Zealand were joint lead managers with ANZ Bank New Zealand as co-manager for the sale. Advisers were Cameron Partners.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tax: GST Threshold For Online Purchases Won't Lower Before 2018

The government wants to lower the threshold on online purchases which qualify for GST from mid-2018, but says more work is needed and there will be no change without public consultation. More>>

ALSO:

North Canterbury: Government Extends Drought Classification

The government has extended a drought classification for the eastern South Island until the end of the year, meaning the area will have officially been in drought for almost two years, the longest period for such a category. More>>

ALSO:

Negotiations Fail: Christchurch Convention Centre Build To Proceed Without PCNZ

After protracted negotiations, the government has ditched the construction consortium it picked to build Christchurch's replacement convention centre, which it now anticipates delivering at least two years behind the original schedule. More>>

ALSO:

Other Centres' Convention Centres:

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news