CBL to raise $132m in IPO

Listings on the main board have dropped off, with only one company Fliway Group listing on the exchange, after a flurry activity of last year, fuelled in part by the government's sell down of its utility companies. Photo NZME.

CBL Corporation is looking to raise up to $132.2 million through New Zealand's second public share offer of the year.

The Auckland-based credit surety and financial risk insurer has today registered a product disclosure statement (PDS) and is aiming for its shares to commence trading on the NZX and Australia's ASX on October 13.

The company has set an indicative price range of $1.45 to $1.85 for its shares, which values the company at $324.3 million to $389 million.

The final pricing will be set through a bookbuild process with brokers and institutional investors on September 17.

Of the total raising of $123 to $132.2 million, $90 million will be new capital earmarked for growth, including funding the firm's $46 million acquisition of Australian specialty insurer Assetinsure Holdings.

Existing shareholders, including managing director Peter Harris, are expected to retain a 60 to 63 per cent stake in CBL following the offer.

The selling shareholders are intending to sell up to 15 per cent of their aggregate pre-offer shares.

The new cash would also increase the firm's regulatory capital and improve its financial ratings "over time", CBL said.

Chairman John Wells said the company had experienced significant growth over the past 15 years.

"CBL has a track record of successfully growing its business by focusing on profitable, non-traditional insurance lines in specific markets," Wells said.

The company, whose products include residential builder warranties and construction bonds, derives almost 98 per cent of gross revenue outside New Zealand, mostly in Europe.

It employs more than 100 staff across eight international offices.

CBL has forecast net profit to rise from $19.4 million in the 2014 calendar year to $26.1 million in 2015 (excluding the contribution of the Assetinsure acquisition) and $40.4 million in 2016.

Including Assetinsure, a $29.2 million profit is forecast for 2015 from a gross written premium of $335 million.

Harris said CBL was a successful New Zealand exporter and the recent weakening of the kiwi dollar was expected to benefit the firm's bottom-line.

"We've got a small domestic market - that's why we've had to scale up our business by taking a global look at the business for the last 15 years," he said.

While the outlook for the global economy is darkening, Harris said CBL's business had proved "immune" to economic downturns in the past.

"We're very diversified in terms of markets," he said. "We're spread across different international markets as well as products."

The offer includes a priority pool for CBL staff and close business associates, which closes on September 14.

A broker firm offer will open on September 21 and close on October 6.
There is no public pool.

The offer is being managed by UBS and Forsyth Barr.

Bancorp and Minter Ellison Rudd Watts are advising the IPO process.