Investors off to sluggish start with Nuplex share rights trading offer

Trading in Nuplex share rights has made a sluggish start but analysts expect it to pick up.

Fewer than 1 per cent of the rights on issue or just 4.45 million of the 577 million changed hands in yesterday's first trading day.

Investors have until April 15 to sell the rights to their shares or take them up. Those who wish to take up the rights must put in $1.61 or 23c per right for every share they own in the seven-for-one rights offer.

The rights trading is part of a $132.8 million capital raising for Nuplex designed to reduce debt and is a condition of a deal made with its bankers on March 16 after the company breached its senior debt cover ratio.

Forsyth Barr analyst John Cairns said the company had a very loyal shareholder base but questioned whether some investors would have the money to take up the rights and maintain their shareholding.

"We are likely to see the volumes pick up as the trading goes on."

Cairns said the worst thing investors could do was nothing.

Those who do not take up the rights face having their shareholding diluted by up to 87.5 per cent.

The trading is a chance for shareholders to get something for their rights, even if it is just a small amount. Yesterday the rights were trading between 4.5c and 8.5c each.

Group managing director John Hirst said he was hoping all existing shareholders took up their rights and did not have to sell them.

"If they don't take them up they are going to be diluted."

The start of the rights issue trading saw Nuplex's share price fall from 81c to open on 35c. It closed on 32c.