The Business Herald’s markets and banking reporter.

Rakon answers trading doubts

Photo / Steven McNicholl
Photo / Steven McNicholl

Technology manufacturer Rakon has responded to a query from the Shareholders Association regarding an "unusual" rise in its share price in the lead-up to a major announcement last week.

The Mt Wellington-based firm's stock rose 26.6 per cent, from 18.3c to 23c, in the eight trading days prior to July 5, when the company announced it would sell 80 per cent of its Chinese joint-venture factory for US$18.8 million ($24 million) to reduce debt.

"We saw some price movements in Rakon that we thought were unusual and wanted to draw that to the attention of the NZX," said Shareholders Association chairman John Hawkins.

Rakon chairman Bryan Mogridge said no company directors, staff, or their related parties, had sought or been granted approval to buy or sell shares before the announcement.

The company - whose products are crucial components of telecommunications infrastructure and consumer goods such as smartphones - is selling the stake in the Chinese plant to Shenzhen Stock Exchange-listed ZheJiang East Crystal Electronic.

The New Zealand company will retain a 5 per cent holding in the venture.

Rakon reported a loss of $32.8 million for its last financial year, when it cut up to 60 local jobs to shift manufacturing to China.

In May the company said it wanted to reduce debt from the $40 million it was expected to reach later this year to $13.5 million by March 2014.

Rakon has been one of the worst performing stocks on the NZX this year.

Its shares, which closed steady at 23c last night, have shed 50 per cent of their value over the past 12 months.

- NZ Herald

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