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


Tegel looks to raise up to $344.4M in first NZ IPO this year

Tegel looks to raise up to $344.4M in New Zealand's first IPO for the year

By Paul McBeth

April 1 (BusinessDesk) - Tegel Group Holdings, the poultry group controlled by private equity firm Affinity Equity Partners, wants to raise as much as $344.4 million in New Zealand's first initial public offering of the year for the NZX mainboard.

The Auckland-based company plans to sell between 137.5 million and 192.4 million shares at $1.50-to-$2.50 apiece, according to its product disclosure statement. The gross proceeds of the IPO would raise between $299.1 million and $344.4 million, of which $131.9 million will be set aside to repay bank debt and between $129.6 million and $163 million will pay out existing holders of Tegel's redeemable shares. The remaining $22.5 million to $25.3 million will cover IPO costs, including an $8 million bonus for senior management.

Tegel is forecasting profit of $10 million on sales of $581.1 million in the year ending April 24, rising to a profit of $44 million on revenue of $637 million the following year, when it intends to pay a dividend of between 7 and 11 cents per share. That implies a gross dividend yield of 6.2 percent to 7.1 percent.

Affinity intends to reduce its 87 percent stake to 45 percent after the offer, at least half of which will remain tied up in escrow arrangements until it announces its 2017 results. The private equity firm will be allowed to sell up to 50 percent of its remaining stake before then if Tegel's shares spend 10 straight trading days at least 20 percent higher than the offer price, once the first-half results are posted.

Tegel will be the first IPO of the year after a sluggish 2015, which saw a number of sales deferred in turbulent financial markets. While private equity owners have attracted scepticism after the failure of consumer electronics store Dick Smith Holdings, investors have been more optimistic about the potential fortunes for Tegel.

The company expects poultry sale volumes to rise to 92,814 tonnes by the 2017 year, of which 16,705 tonnes will be exports. That compares with 80,273 tonnes sold in 2015, including 13,125 tonnes of exported product.

In a letter to investors, chairman James Ogden said Tegel plans to focus on new product developments to increase the value and volume of poultry sold, expand value-added production, develop new sales channels, and enter new export markets.


© Scoop Media

Business Headlines | Sci-Tech Headlines


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>


Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>


Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>


Divesting: NZ Super Fund Shifts Passive Equities To Low-Carbon

The NZ$35 billion NZ Super Fund’s NZ$14 billion global passive equity portfolio, 40% of the overall Fund, is now low-carbon, the Guardians of New Zealand Superannuation announced today. More>>


Split Decision - Appeal Planned: EPA Allows Taranaki Bight Seabed Mine

The Decision-making Committee, appointed by the Board of the Environmental Protection Authority to decide a marine consent application by Trans-Tasman Resources Ltd, has granted consent, subject to conditions, for the company to mine iron sands off the South Taranaki Bight. More>>