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Napier Port jumps 12% on NZX debut following oversubscribed public offer

Tuesday 20th August 2019

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Napier Port debuted at $2.91 on the New Zealand stock exchange, up 12 percent on its initial public offer price, amid pent-up demand after an oversubscribed bookbuild earlier this month.

Hawke's Bay Regional Council raised $234 million selling 90 million shares, or 45 percent, of the port operator. 

“Today is the culmination of a five-year journey that has seen the port, Hawke’s Bay Regional Council and the broader community working in close partnership towards a shared goal,” chair Alasdair MacLeod said after ringing the bell at a listing ceremony at the port’s Breakwater Road site in Napier.

The shares were priced at the top of their $2.27-$2.60 indicative range and the $2.60 price was a 2020 per-share price-earnings ratio of 26 times.  The shares recently traded at $2.92. 

Port employees, residents, non-resident ratepayers and iwi, which were granted priority entitlements in the IPO were allocated 20 percent of the shares on offer. Close to 90 percent of the 7,591 applicants in the priority offer received their application in full, with only those who requested over $10,000 of shares having their applications scaled. 

The strong level of total demand, however, meant that material scaling was necessary across all investors groups. 

According to Napier Port, on listing the company is approximately 90 percent New Zealand-owned. 

Of the capital raised,  $110.2 million will be used to repay the Port’s existing debt and provide cash and undrawn debt facilities sufficient to meet the port’s future capital requirements, including the construction of a new multi-purpose wharf, 6 Wharf, on the north side of the existing container terminal.

A further $107.9 million of the capital raised in the IPO has enabled the Hawke’s Bay Regional Council to realise a portion of its investment in the port.

The remainder has been used to fund interest-free limited recourse loans to eligible port employees to buy shares and to meet costs associated with the IPO.

It was the second new equity IPO this year after pre-revenue medicinal cannabis research firm Cannasouth went public in June.

It had been more than two years since the local market attracted any new equity listings, although cheap finance meant the debt market was an attractive alternative for firms to raise money.

(BusinessDesk)



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