Pike River Coal has been busy touting its stock to potential investors overseas but the NZX-aspirant has so far attracted little attention from local brokers.
Only three local research houses have confirmed they will cover the New Zealand Oil & Gas subsidiary, which last week released a prospectus
detailing its plan to list on the NZX and ASX.
The company is seeking $65 million to fund further development of its West Coast mine in an initial public offering (IPO), and will have a market capitalisation of $180 million.
Apart from Pike River lead broker and underwriter McDouall Stuart, only research houses ABN Amro and Forsyth Barr will watch the stock.
ABN Amro's Brett Orsler, who covers Pike River's largest shareholder NZOG, said he was still halfway through the "hefty" 190-page prospectus document. Forsyth Barr's Guy Hallwright said he had not yet looked at the company in depth.
Pike River has worked hard to tempt potential investors, as well as brokers and media, organising eight field trips to the coal mine in the past five months.
McDouall Stuart has touted the stock to institutions in the UK and Australia, and plans to visit Australian institutions again next week. Pike River will also start a national roadshow to promote the stock next week.
The mine, in the Paparoa Ranges, 46km northeast of Greymouth, is predicted to be the country's second largest exporter of quality coking coal. Seventy per cent of the first three years' worth of coal has already been sold to Indian and Japanese steel companies.
McDouall principle Andrew McDouall said unlike other company's IPOs, the mine offered something to see and a place to go. "It's hard to put the scale of the project into context without going out there."
McDouall said a number of institutes on the sub-underwriting panel expressed interest in firm stock. Some interest had come from India, but most was from New Zealand, Australia and the UK.
The Pike River prospectus contains no concrete earnings forecast. Orsler said that was because it was too early to offer forecasts because of coal's sensitivity to spot prices, and, because coal is sold in US dollars, the US exchange rate.
