Pyne Gould set to enter NZX top 50 after rights issue

Pyne Gould Corp chairman Sam Maling. Photo / Greg Bowker

Pyne Gould Corp's underwriters have picked up 11.3 per cent of a $237 million rights issue and the company will now proceed with placement to raise $15 million to $30 million more.

As a result of the capital raising PGC is expected to enter the NZX's top 50 index around 31st place.

Major shareholder and director George Kerr is expected to end up with around 14.5 per cent of the company after taking up his rights and acting as a sub-underwriter.

This was a monster rights issue, raising 200 per cent of the company's market capitalisation when announced. The level of trading of rights was high at around 35 per cent compared to 13 per cent for the Nuplex rights issue and 17 per cent for the Fisher & Paykel Appliances rights issue.

"We emerge from this process with a strong capital structure and a broader base of shareholders," chairman Sam Maling said.

First NZ Capital underwrote the rights issues and had sub-underwriters in for some of the exposure.

Shareholders could buy six shares for every one share owned at 40c each. Acceptances were received for 88.7 per cent of the shares on offer, leaving underwriters to pick up 11.3 per cent of the offer.

The question of whether the underwriters and people who bought rights will hold or seek to sell the shares onmarket is an open one. Mr Maling said the outcome of the rights issue was never in doubt because it was underwritten but the fact there was only a modest shortfall for an offer this size was extremely encouraging.

The allotment of new shares from the rights issue takes place next Tuesday. Shares closed steady at 46c yesterday.

The company has also signalled a share purchase plan will be available where shareholders can apply for up to $5000 of additional shares.

- NZPA