Suspended CBL warns capital raising will need 'a number of weeks'
By Paul McBeth
Feb. 12 (BusinessDesk) - Insurer CBL Corp says it hasn't worked out how much capital it needs to raise to satisfy regulatory solvency concerns and may take "a number of weeks" to finalise any transaction.
The Auckland-based credit surety and financial insurance risk firm's stock has been suspended from trading on the NZX as the stock market operator tries to work out whether it's kept the market informed of material information and met continuous disclosure obligations. Trading in the stock was halted before the suspension with details eked out over subsequent days that prudential regulators in New Zealand and abroad questioned the adequacy of reserves for its French construction insurance division, prompting a credit rating downgrade and prospective capital raise.
Dual-listed CBL had already sought a voluntary suspension on the ASX to let it discuss the proposed capital raising with its major shareholders, and today it sought to extend that suspension.
"CBL is still working towards a capital raise, but the timing for this as well as the proposed amount have not been finalised, and are dependent on a range of factors including engagement with regulators and potential investors, which are likely to require a number of weeks," it said. "CBL will continue to update the market in this regard."
The stock last traded on the NZX at $3.17 before being suspended last week, more than twice the $1.55 price the shares were sold at in an initial public offering in late 2015.