Pulse shareholders agree to cede control to Buller Electricity in recapitalisation
Aug. 18 (BusinessDesk) – Shareholders of Pulse Utilities Ltd. have approved a rescue deal that will give control of the company to Buller Electricity Ltd. in exchange for capital to repay debt and expand.
Buller will inject $6.5 million to lift its stake to 73% from about 8.5%, though it may subsequently reduce to as low as 65% following a share purchase plan that aims to raise up to $1.5 million. Pulse also gets access to a $1 million overdraft facility and can free up $2 million of cash by using new banking facilities to meet industry security requirements, Pulse said.
“Pulse ticks all the boxes for us, except profitability, and that will come,” Buller chairman Frank Dooley said in a statement.
Pulse aims to lift its customers to 40,000 by the end of fiscal 2012 and 61,000 a year later, from 28,000 now. Managing director Dene Biddlecombe said the firm has 3% of New Zealand’s retail electricity market and is “rattling the cages of the big players.”
All existing shareholders of Pulse will be diluted down from owning 100% of the company to owning 12.6%.
Pulse shares last traded at 15 cents, valuing the company at $4.6 million. They have slumped 67% in the past 12 months.