Local steel products maker Steel & Tube is looking at a return to the NZX 50 index after ASX-listed owner Arrium sold its majority stake for $91.2 million today.
The greater liquidity would help Steel & Tube return to the benchmark index at its next review, which would generate more interest in the company.
The Australian company, formerly known as OneSteel, appointed an investment bank to underwrite and manage the sale of its Steel & Tube stake at $2.05 a share, a 15 percent discount to the Steel & Tube's closing price yesterday.
The stock dropped 8.7 percent today to $2.21. Steel & Tube's chief executive Dave Taylor said the company will have to review its strategy with a new capital structure, which could include raising capital if there was any industry consolidation.He declined to comment on whether Steel & Tube was looking at any acquisitions.
On a positive note it sees signs the rebuild in Christchurch is underway, albeit slowly and it is being led by the residential sector, infrastructure and preparatory activities of companies in readiness for the rebuild.
Similarly, residential activity in Auckland is picking up, while oil and gas activities continue in the Taranaki region.
STU reports that its is in very good shape with strong cash flows and a strong balance sheet and is well positioned for the future.
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