Napier Port considers $75m bonds offer

More offer details are expected from Napier Port in the next week. Photo / NZME

Napier Port Holdings Limited (Napier Port) is expecting to make further announcements in the coming days about an offer aiming to raise up to $75 million.

The proposed offer to Australian and New Zealand institutional investors was foreshadowed in a statement saying further details will be released during the next week.

It said the offer would be inclusive of the Shareholder Priority Offer and with the ability to accept over subscriptions of up to a further $25 million at Napier Port's discretion and would be unsecured, unsubordinated, fixed rate bonds.

The offer will likely comprise a "Firm Offer" expected to open on September 12 and close at five days later, and a "Shareholder Priority Offer" in the same week.

It would be available to Eligible Shareholders as determined on September 9 and shareholders can now pre-register their interest in the Shareholder Priority Offer at napierport.bondoffer.co.nz.

There will be no public pool for the offer, the statement said.

The company has appointed Craigs Investment Partners Limited as Arranger and Craigs, Forsyth Barr Limited, Jarden Securities Limited and Westpac Banking Corporation as Joint Lead Managers in relation to the offer.

Company CEO Todd Dawson said the port had gone for a bond issue because it had a substantially lower risk profile with its $173m to $190m new wharf project complete.

"It also offers an opportunity for existing investors to have another opportunity to invest in the port as well through a different mix and provides us with the ability to diversify the debt facilities at the port," he said.

"I think for a lot of reasons, it makes sense for us to do it, it gives us a good longer term tenure around the debt availability for the port which is on competitive rates."

Napier Port expects its net debt to EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio to peak in the near term above its target ceiling of 3.5x following the completion of the 6 Wharf construction project and due to lower earnings in the current financial year.

Over time it expects its debt ratio will be managed to within its long-term target range of 2.0x to 3.0x.

Investors can register their interest in the proposed Offer by contacting a Joint Lead Manager, or their usual financial adviser.

Indications of interest will not involve an obligation or commitment to acquire any bonds.