Almost 600 million new Pyne Gould Corporation shares were officially issued to shareholders yesterday and market watchers are now waiting for a string of substantial shareholders notices which will reveal which big investors have backed the company.
PGC's shares held their ground at 44c despite the official allocation to investorsyesterday of 591 million new shares under the company's recently completed pro rata renounceable rights issue.
Hamilton Hindin Greene broker James Smalley said he wasn't surprised PGC's shares had remained firm given institutions had last week shown sufficient appetite to take the entire $30 million the company was seeking to raise via a placement at 43c a share.
While Smalley saw potential for selling pressure on the stock over coming sessions, he didn't expect to see it slip much below 42c or 41c, a level representing the 40c a share exercise price for the rights plus transaction costs.
He expected substantial shareholder notices over coming days would provide interesting information on which investors had supported the company.
He noted there had been considerable speculation a number of Australian institutions had supported the capital raising by buying up rights.
Substantial shareholder notices would likely reveal to what extent that was the case.
The notices must be filed once an investor's stake rises above 5 per cent, or if a stake above 5 per cent increases or decreases by one percentage point or more. Investors are required announce this information "as soon as the person knows, or ought to know" this has happened, according to the Securities Markets Act 1988.
The only substantial shareholder notice filed in relation to PGC since its capital raising has been from the Accident Compensation Corporation, which on Friday said its stake in the company had risen to 6.61 per cent.
Ahead of PGC's capital raising, some other local institutions indicated they were not convinced by PGC's business plan and would not look to participate.
By virtue of PGC's likely inclusion in the NZX-50 index, they may have to buy shares to maintain their investment benchmarks.
