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  • CEN6.38

    $0.081.25%

  • Open 6.3 High 6.38 Low 6.29 Bid Price 6.31

    Offer Price 6.38 Value 306573.89 Volume 48464

Current as of 26/12/14 05:00PM NZST

Contact Energy unveils $350m geothermal rights issue

Contact's Wairakei Geothermal Power Station. Photo / Alan Gibson
Contact's Wairakei Geothermal Power Station. Photo / Alan Gibson

Energy generator and retailer Contact Energy has announced a one-for-nine renounceable rights issue to raise around $350 million to help fund new geothermal electricity generation plant.

Pitched at $5.05 a share, the offering represents a 13.8 per cent discount to yesterday's NZX closing price, and a 15.4 per cent discount to the three month volume weighted average price for Contact shares.

See the rights issue presentation for investors here.

Contact's 51.4 per cent majority shareholder, Origin Energy, will take up its full entitlement, and any shares not taken up by the June 1 deadline will be reoffered in a short book-building operation for offer to institutional and other investors.

"This offer will give existing shareholders the opportunity to participate in future growth of the company," said newly installed chief executive Dennis Barnes in a statement.

"The offer is available to shareholders on equal terms and provides them with a choice as to how to participate."

Rights will be tradeable on the NZX from May 5 until May 26. Record date for eligibility will be May 9, offer documents will be despatched on May 12, and the offer period will run from May 13 to June 1, with allotments on June 9.

Any subsequent bookbuild will occur on June 8, with allotments on June 13.

Contact green-lit an investment of $623 million on its 166 Megawatt Te Mihi geothermal generation station on February 22, and market-watchers have been anticipating the announcement of the capital-raising details.

The new plant, which will allow the closure of part of the ageing Wairakei geothermal power station, will be completed by mid-2013. Contact has appointed Craigs Investment Partners and the Auckland branch of Deutsche Bank as one underwriter, and Goldman Sachs and Partners as another, to underwrite the issue, apart from the Origin Energy portion.

Contact shares opened this morning at $5.85, down 0.2 per cent.

- BusinessDesk

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