Stocks to watch: Wrightson settlement, FPA loan talks

Monday 27th April 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading Friday.

Themes of the day: Finance chiefs from the Group of Seven nations said the global economy may begin a 'weak' recovery this year, stoking optimism the recession may have bottomed. Shares on Wall Street advanced, with the Dow Jones Industrial Average gaining 1.5% on Friday. In New Zealand, investors are awaiting the central bank's review of monetary policy this week, amid expectations Governor Alan Bollard will cut the official cash rate 50 basis points to 2.5%.

Air New Zealand (AIR): Rival Qantas Airways on Friday said sales of premium seats have fallen about 30% in the face of the global recession. The company is reviewing its fleet configuration and may change seat arrangements to adjust to the lower demand, chief executive Alan Joyce told Bloomberg. Air NZ rise 3.7% to $1.11 on Friday.

Contact Energy (CEN): The biggest utility on the NZX 50 slipped 0.4% to $5.58 on Friday amid concern it will miss its full-year profit forecast after shedding 8% of its customers since a peak in September, losing the best part of seven years of customer growth. Contact's electricity customers fell to 487,000 as at March 31 from 517,000 at the same time last year. Its gas customer base suffered an even worse drop proportionally, down 10.7% to 67,000.

Fisher & Paykel Appliances (FPA): The shares fell 2.2% to 45 cents on Friday. The manufacturer is in talks with its banks to refinance $80 million in a short-term facility that comes due on April 30.

Freightways (FRE): The transport and logistics company today announced details of its share purchase plan to raise $5 million on about the same terms as its $45 million institutional placement earlier this month. The share purchase plan will start on May 11 and the company plans to give a trading update before then, on April 30. The share price will be the lesser of $2.44 and the volume weighted average market price of Freightways shares in the five days before the SPP begins. The shares jumped 4 cents to $2.70 on Friday.

Nuplex Industries (NPX): The shares climbed 3% to 34 cents on Friday after the company lifted the sale price of shares in the top-up component of its capital raising. The specialty chemicals maker raised an additional $26.7 million, bringing the total to $159.5 million, after arranger First NZ Capital used a call option to place the equivalent of 15% of Nuplex's stock with sub-underwriters. The price was bumped up to 27 cents a share from 23 cents.

PGG Wrightson (PGW): The rural services company on Friday settled its dispute over a failed alliance with Silver Fern Farms for cash and shares amounting to about $42 million. Under terms of the settlement, Wrightson made a $25 million payment on Friday in addition to $5 million already paid. It will issue 10 million ordinary shares, worth $12 million at Friday's price of $1.20 per Wrightson share. To conclude the settlement, Wrightson obtained what is effectively a $25 million loan from South Canterbury Finance, with the finance company holding the right to convert the debt to shares.

Rubicon (RBC): Funds associated with Knott Partners LP finalised the terms of its offer for 10.83% of the shares of the biotech company specialising in tree crop research that it doesn't already own. The offer is 70 New Zealand cents a share, it said in a statement today. The offer closes on May 27 and if successful, will see Knott increasing its aggregate shareholding in Rubicon to 27% from 18.5%. The shares last traded on April 23 at 63 cents.

Telecom (TEL): The carrier's XT Mobile Network will be launched on May 13, providing coverage to 97% of the country. The new network brings Telecom in line with the majority of the rest of the world and in step with rival Vodafone Group. The shares traded at $2.59 on Friday and have gained 12% this year.

Businesswire.co.nz

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