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

 

Season Ends: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news