By ELLEN READ
Tranz Rail shares shed just over 10 per cent in value yesterday to a new low as the company's fortunes continue to spiral.
The shares dropped as much as 20c to $1.55, before ending down 18c or 10.3 per cent at $1.57 on solid turnover of 1.1 million
shares.
Last week the national rail operator shed 15 per cent in market value, leading the Stock Exchange to demand a "please explain" from the company - its second in less than a month.
The exchange has no set level at which a company is asked to explain a rise or drop in its share value and as nothing has changed for Tranz Rail since last week a further explanation is unlikely to be required.
Tranz Rail shares have fallen 60.75 per cent since January amid company warnings of a pending $170 million write-down and a scaling back of earnings forecasts.
Responding to last week's exchange request, chief financial officer Wayne Collins said:
* Tranz Rail's banking arrangements were due for renewal on October 16.
* Standard & Poor's had placed Tranz Rail on a negative credit watch with a view to a possible downgrade - which could result in the company having to give a $115 million letter of credit to the lessor of the interisland ferry Aratere.
* Tranz Rail was considering its capital structure.
* The company's full-year operating profit would meet previous forecasts ($26 million net profit) and the amount of write-downs would be at the lower end of the range previously indicated ($170 million). Its annual results are due on September 12.
The surveillance panel is already looking into two complaints that Tranz Rail withheld information from investors.
