Nuplex wins bank support, to raise NZ$110 mln

Nuplex wins support from banks, plans NZ$110M capital raising

March 16 – Nuplex Industries gained approval from its banks to amend terms of its loan covenants and announced plans to raise NZ$110 million selling shares to help repay debt.

Shares of the specialty chemicals manufacturer were halted pending the capital raising, which will be by way of a placement to institutional investors and a pro-rata renounceable rights issue to existing Nuplex investors.

Nuplex’s banks agreed to loosen the terms of its senior debt cover ratio, waiving the requirement that it be no more than 3 times in the period up to April 30 and allowing the ratio to reach 3.5 times between May 1 and June 29, easing back to 3.25 times from June 30 to Sept. 29 and back to 3 from Sept. 30, according to a company statement today.

The banks imposed conditions on the agreement, including capping dividend payments at 60% of net profit, applying any assets sales proceeds over NZ$2 million to debt repayment and taking a general security over the company’s Australian and New Zealand assets. Under the new arrangements, the company’s debt ratios will be tested monthly, Nuplex said.

Shares of Nuplex have tumbled 64% this year as the weakening New Zealand dollar drove up the value of foreign debt while asset values fell and demand waned. The stock was last at NZ$1.07.

Nuplex bank debt facilities total A$350 million and following the capital raising the total amount drawn will be about NZ$240 million, it said.

Details of its debt are as follows:
• Citibank A$50 million maturing November 200
• Commonwealth Bank A$100 million maturing November 2010
• HSBC A$100 million maturing November 2011
• Westpac A$100 million maturing November 2011
• Capital Notes NZ$52.6 million maturing September 2012

The book-build process starts today and runs through until 10 am on Wednesday.

The placement and rights issue will be managed by First NZ Capital Securities, which will also underwrite the rights. The number of new shares allotted is likely to exceed 15% of existing shares on issue and the company will hold a special shareholder meeting on April 3 to gain approval for the plan.

(Businesswire)

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