Smartpay set for $6m share sale

File photo / NZH

Eftpos terminal provider Smartpay is seeking to sell $6 million of redeemable preference shares which pay a fixed dividend of 10 per cent a year.

The goal is to reduce interest costs of 16 per cent to 17.95 per cent a year for existing corporate debt. The shares are similar to debt instruments in that they pay a fixed amount each year and the company obtained a ruling from NZ Regulation that said they are debt securities.

SmartPay managing director Ian Bailey said the company's interest costs had been high because of difficulties in obtaining suitable funding but this was expected to change during the next 12 months. In the 2010 financial year interest costs were $2.4 million and this would rise to more than $3 million for the year ending March 31, 2011.