by Jenny Ruth
Friday 9th June 2006
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In a novel twist, rather than paying for their shares in cash, potential investors can offer to transfer shares they hold in other companies or other assets to Viking. Listed securities being offered would be valued at their average closing price over the 20 business days before the offer closes, expected to be June 21, less a 5% discount.
King, who will be executive chairman, has committed to buy 20 million shares which would give him a 33.3% stake if only $15 million is raised. Fellow director Grant Baker, who is chairman of liquor marketer 42 Below, will subscribe to 6.7 million shares. Former finance minister Sir William Birch is the other director.
All subscribers will receive one warrant for every six shares issued exerciseable at 25 cents between July this year and October 2008. King will be awarded an additional 10 million warrants and Baker 3.3 million, both parcels exerciseable at 30 cents.
King points out that for those warrants to have any value, the share price will have to have risen 20%.
"We're putting money in, not taking money out," King says.
King stepped down as Dorchester's managing director in February.
Contrary to reports, Viking won't be specifically targeting finance companies. While he expects further finance company collapses such as that of National Finance, those companies are highly leveraged and are unlikely to have any equity left in them, King says.
"People are starting not to pay their loans so it's not a great time to lend. I think there are better options than that."
King things the share market and other assets are currently over-priced and that when the inevitable correction comes there will be significant opportunities for his investment style.
"We're happy to work on companies and restructuring. We will be very much hands on in making money out of situations," he says.
"We won't be like a fund manager. We will only get into things where we have an opportunity to add our skills. We're not just there watching the wind blow."
Viking's main focus will be on New Zealand, but it may look to Australia in future - King says he's spending about a quarter of his time there.
It also plans to be actively involved in merchant banking transactions - at Dorchester, King was involved in the 42 Below, Finzsoft, New Zealand Finance and Salvus floats as well as a number of transactions for private companies.
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