Nuplex lodges offer document for rights issue
23 March, 2009
Nuplex lodges offer document for rights
issue to reduce debt
Previous EBITDA guidance
Nuplex Industries Limited, the international resins and specialty chemicals group, today lodged with the New Zealand Stock Exchange and the Australian Securities Exchange the offer document for its NZ$132.8 million rights issue. The offer document will be mailed on 2 April 2009 to shareholders with registered addresses in Australia and New Zealand at 1 April 2009 and the offer, which is fully underwritten, will close on 20 April 2009.
In accordance with ASX timetable requirements, a letter will be sent to all shareholders, on 25 March 2009, advising them of their entitlement, based on their current shareholding.
A copy of the offer document, which includes the investment statement and short-form prospectus under the New Zealand Securities Act is available on the company's website: www.nuplex.co.nz. A copy is also available on the NZX and ASX market announcement platforms.
The offer document reiterates the company’s earlier guidance of EBITDA (earnings before interest, tax, depreciation and amortisation) of approximately NZ$43 million for the second half of FY2009. It also confirms that, in the opinion of the directors, the funds raised through the rights issue will be sufficient to meet Nuplex’s medium-term capital needs.
‘We believe that long-term prospects for Nuplex are sound and the fully underwritten rights issue represents an attractive opportunity for shareholders to acquire further shares,’ said Mr Robert Aitken, chairman of Nuplex. ‘The pro-rata rights issue will give shareholders the opportunity to benefit alongside leading investment institutions which have agreed to underwrite the offer.’
‘The entitlements are valuable and if shareholders do not either accept the offer or sell their rights, this value will be forfeited. We therefore encourage shareholders to read the offer document when received and consult their stockbroker or financial adviser.’
The proceeds of the rights issue will reduce Nuplex’s bank debt to approximately NZ$275 million at the end of April 2009. This will lower the company’s gearing (debt/debt+equity) ratio from 52.3 per cent to approximately 37 per cent. Interest costs will also be reduced.
In common with many international groups, the company matches its overseas assets with foreign currency borrowings in order to provide a natural hedge. Nuplex’s bank debt increased to NZ $371 million at 31 December 2008 due to the depreciation of the New Zealand dollar against currencies in which the debt is denominated. At the end of February 2009 it had increased to NZ $400 million as a result of a further decline in the New Zealand dollar. As overseas assets also increased correspondingly, the gearing ratio remained unchanged.
Mr John Hirst, managing director of Nuplex, said: ‘Nuplex now has a global presence, with operations in ten countries across Australasia, Europe, North America and Asia, and more than 50 per cent of revenue comes from outside Australasia. Our businesses continue to trade profitably and are well positioned in their markets, with the majority of our products being essential inputs to customers’ manufacturing processes.’
most manufacturers, we are exposed to global economic
conditions, the restructuring programmes we have already
activated will reduce operating costs. Margins are also
expected to increase due to lower raw material
‘This capital raising will enable us to maintain our market positions and continue to focus on segments where we can add value through our technology and technical service leadership.’
Rights may be traded on the Australian Securities Exchange from 26 March to 9 April 2009 and on the New Zealand Stock Exchange from 2 April to 15 April 2009.