DNZ float scuppered

Thursday 3rd December 2009

DNZ has given into strong criticism and decided to can its $140 million initial public offering – for now.

The company announced last night that it has deferred the sharemarket float until next year

It says the debate in the media over the IPO "has resulted in confusion and concern amongst some of our shareholders."

A key point of contention is DNZ plans to use $43 million of the float proceeds to buy the management contract from chief executive Paul Duffy and former chairman Alastair Hasell.

The board say "it has a duty to take time to clarify matters for shareholders and correct any misconceptions. It is not appropriate to continue to debate the merits of these transactions in the media. It is damaging to the Company and to its future prospects. It also has the potential to undermine the relationship between the board and the shareholders."

While the IPO has been postponed the board say, in a statement, that they "unanimously support the proposed capital raising and listing and firmly believe this is in the best interests of the company and its shareholders."

While groups like MMG and individual shareholders have been vocal in their opposition to the structure of the IPO the board claims it has "received overwhelming positive support from the...capital market."

DNZ says the postponement will give stakeholders "time to properly reflect on the board composition and the current proposal."

It intends to explain other possible options and why they believe they are inappropriate for the long term future of the company.

"In the interim we will continue to manage the challenges the company faces in today's difficult environment and will re-establish the unlisted trading market which last traded the Company's shares at $0.40 (or post consolidation $1.00)."

All applications monies received to date will be refunded.

See what investors are saying here

and here

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