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

 

Salus may be first NZ IPO in 2018

Salus may be first NZ IPO in 2018, raising up to $35M ahead of dual-listing to repay debt and grow

By Jonathan Underhill

April 30 (BusinessDesk) - Salus Aviation Group, one of the largest general aviation companies in the fragmented Australasian market, plans to go public next month, raising up to $35 million ahead of a dual listing on the ASX and NZX.

The Auckland-based company, which counts Bancorp Wealth Management as its largest shareholder, is aiming to list in late June after selling about half the company to the public. It will be the first time Bancorp, a merchant and investment banking group, has brought its own business to market, managing director Craig Brownie told BusinessDesk.

Salus about doubled in size last November after acquiring aviation engineering firm Oceania Aviation for cash and shares and bringing on board Oceania investors including Jonathan Bowen, Joshua Camp and Gordon Luke. The capital raising will be used to repay debt and fund the company's expansion plans, with no selldown by existing shareholders.

Following the IPO, the company would have total assets of $85 million and total debt of $18.8 million, the Australian Financial Review reported today. It also has a $40 million facility at Bank of New Zealand, which the AFR reported would leave Salus with about $20 million available post-listing. It said Salus chief executive Don McCracken and CFO Stephen Dey have met with fund managers in Australia and plan to do the same in New Zealand in coming days. Brownie confirmed the financial details in the report were correct.

Bancorp first flagged its plans for an NZX/ASX listing of Salus last June, as part two of a restructuring plan, having reduced its direct holding in aviation insurance broker Boston Marks last year. Taking Salus public may see Bancorp's own shares eventually delist from the Frankfurt Stock Exchange, where they have lacked liquidity, as shareholders will be encouraged to exchange their Bancorp shares for Salus shares. Bancorp Wealth Management New Zealand listed on the German bourse in 2014.

Brownie said he is constrained in talking about the plans ahead of IPO documents being lodged, expected to be in late May or early June. He said Salus is a beneficiary of the tourism boom in New Zealand and increased demand for light aircraft and helicopters in the primary sector as operators tend to run their aircraft harder.

"What's booming at the moment is agriculture and tourism," he said. "They're not necessarily buying more choppers but flying more hours. That's what really underlies our business. You've got to have all your maintenance stuff certified by engineers."

The value of the helicopter fleet in New Zealand it is about US$1.7 billion while Australia's is worth about US$4 billion, suggesting that market has more scope to grow. The expansion is likely to include strategic acquisitions, Brownie said.

Salus has a fleet of 27 fixed-wing and rotor-wing aircraft across its operations and leasing businesses and the company also imports and refurbishes aircraft for sale. Its services include sales of parts, aircraft maintenance, avionic systems, flight operations, parts design, component overhaul, leasing and sales. It has about 180 staff, 11 facilities across New Zealand and customers across the ANZ region.

"When you buy a secondhand helicopter you're buying an engine with metal attached," he said. As parts are overhauled and replaced over time, the airframe is often the only original item left.

Salus expects to generate revenue in full-year 2019 of about $73 million and earnings before interest, tax, depreciation and amortisation of $11.5 million.

The joint lead managers for the IPO are expected to be Bancorp and Foster Stockbroking. Last August, Bancorp gained NZX accreditation as an NZX sponsor and NZX distribution and underwriting sponsor.

"We see opportunities in that sub-$100 million market cap range for listings in New Zealand and Australia," and the decision to dual list reflected the need to cast a wider net for capital than just New Zealand, to ensure there was enough support for the IPO, Brownie said.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Government: RSI ‘State Of The Nation’ Report Published
latest research, science and innovation system report card is now available, and outlines how the system is performing, Research, Science and Innovation Minister Megan Woods has announced. “The report seeks to increase transparency, act as a reliable data source and stimulate discussion... More>>




Fonterra: Increases 2021/22 Forecast Farmgate Milk Price

Fonterra Co-operative Group Limited today increased and narrowed its forecast Farmgate Milk Price range to NZD $7.90 - $8.90 per kgMS, from NZD $7.25 - $8.75 per kgMS. The midpoint of the range, which farmers are paid off, has increased to NZD $8.40 per kgMS, from NZD $8.00 per kgMS... More>>

Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>



Pamu & Westpac: Market-leading Sustainability-Linked Loan

Westpac NZ and Pāmu have signed New Zealand’s most comprehensive Sustainability-Linked Loan to date, also the largest in the agricultural sector, and the first involving a state-owned enterprise. Pāmu, also known as Landcorp, is New Zealand’s biggest farming business. It will borrow $85m from Westpac NZ over three years... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>