Stock takes: Plexing its muscles

It looks as though things are finally going Nuplex's way after a capital raising that ran far from smoothly. The company's shares, no doubt helped out by a positive trading update earlier this week, have continued to rise since the capital raising was concluded, yesterday closing up 3c at 46c - twice what some investors paid for them in the capital raising.

PEAS IN A PODMORE

Kevin Podmore's St Laurence Funds Management has been running adverts for a new investment opportunity. Subsidiary Commercial Property Securities is looking to raise $5 million or even up to $10 million including oversubscriptions in an offer of redeemable preference shares.

Commercial Property Securities will lend the money to another St Laurence company, The National Property Trust which is the manager for listed National Property Trust, which will use the money to buy more units in the trust from St Laurence. St Laurence will use the money to help repay debenture investors under its repayment plan.

The redeemable preference shares will pay 9.25 per cent over three years or 10 per cent over five.

But given National Property Trust units are offering a yield at present of a whopping, and to be fair probably unsustainable, 19 per cent, why wouldn't investors just buy units directly?

An answer from St Laurence was not forthcoming by press time yesterday.

National Property Trust was down 1c at 36c yesterday.

BUILDING CAPITALING

Property Trust was identified by Macquarie analysts recently as having the greatest risk around its capital structure among the local listed property vehicles.

Stock Takes understands Macquarie has come to the conclusion that with about $400 million in debt needing to be refinanced by the end of the year, the trust has little choice but to go to the market.

The trust is the jewel in the crown of ING's property assets in New Zealand which include sizeable stakes in AMP NZ Office Trust, Goodman Property Trust and Kiwi Income Property Trust.

One analyst told the Business Herald in February that the listed property sector was in "good shape" when it came to debt levels and rollover risk.

To be fair, that was before the market took a big dive, thereby altering the equation. Still, since then Kiwi Income and AMP NZ Office Trust have both been to the market to raise cash and reduce debt. Who would be surprised if ING followed suit?

Then again, another view is that with the trust's units now trading at a 47 to 48 per cent discount to their March 31 valuation, a better way to repair its capital structure is to sell more assets.

ING Property Trust units were steady at 57c yesterday.

TWO GOODMANS

Given Goodman Group's difficulties over the Ditch, as mentioned last week in Stock Takes, the prospect it might be forced to sell its cornerstone holding in NZX-listed Goodman Property Trust has been percolating for some time.

Meanwhile, with most of its contemporaries having to raise capital, many consider Goodman Property Trust likely to do the same.

Mind you, attempting to raise capital through the issue of new units would be hard going when one of your major shareholders is unloading such a large stake.

Pretty difficult, too, for your regular broker - which in this case Stock Takes understands is Macquarie - to handle both chunks of business at the same time or very close together.

Could be that if it does indeed need to raise capital, GPT might look for someone else, preferably with the financial clout to underwrite an offer.

Goodman Property Trust units closed up a cent at 86c yesterday.

SPEAKING ITS MIND?

Chatting with a local market watcher yesterday about the volatility seen in some of the NZX's penny dreadfuls, the topic turned unsurprisingly to Plus SMS. Having been trading at around the 0.5c level, the company's shares have almost doubled in value in recent days.

Plus SMS has been conducting a capital raising lately seeking to raise $626,000 through the issue of 125 million new shares priced at 0.5c each. Stock Takes assumes it's been an uphill battle as the share purchase plan has been extended twice this month.

Given it accounted for a disproportionate share of the NZAX's total cap a few years back, when Plus SMS' share price gyrated wildly, so did the market. That helped prompt the Securities Commission to launch an investigation into the way the NZAX market was working and a separate one into Plus SMS. That was in 2006 and the commission has said nothing on the matter since. Stock Takes asked them how the investigation was going, three years on. "We have nothing to say," was the not entirely unexpected response.

CHARLIE'S COULD BE LOOKING TO SQUEEZE SOME CASH

Scuttlebutt in the market is that Stefan Lepionka and Marc Ellis' Charlie's has engaged ABN Amro Craigs to sound out investors regarding a possible capital raising. Lepionka was unavailable for comment yesterday but shares in his company have staged something of a recovery in recent weeks after falling as low as 8c back in March.

Earlier this month, a few days after the company appointed Australian juice industry expert Gavin Clifford to its board, they surged to 12c but closed yesterday down 0.2c at 10.8c.