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Life Pharmacy to raise $9m for working capital, debt

By Jane Shanahan

Thursday 7th August 2008

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Life Pharmacy, which owns and franchises pharmacies in New Zealand, plans to raise at least NZ$9 million through a three-for-two renounceable rights issue.

The company will offer partly paid shares for an initial 20 cents apiece and another 20 cent payment 12 months after the stock is issued, it said in a statement today. The offer amounts to a 9% discount to the current stock price of 44 cents. Life Pharmacy has declined 14% so far this year.

Life Pharmacy has a 49% stake in 19 pharmacy companies, which own 22 of the 36 Life Pharmacy and Care Chemist brand stores. It also operates two Life Outlet stores and is franchisor to 10 Care Chemist stores.

The company has applied to the NZX to have the rights listed on the exchange and to allow oversubscriptions if needed. LPL Trustee and PIMS 2005, Life Pharmacy's two biggest shareholders, support the share sale and may scale their purchases to allow other holders to take up their rights, the company said.

The company's net loss narrowed to $570,000 last year from a loss of NZ$$6.6 million in 2007. Sales rose 28% to NZ$6.4 million.

The previous year's loss included an impairment charge of $6 million on associate stores and

Chief executive Philip Ingham told shareholders at their annual meeting today that trading in the first four months of the current year was similar to the year-earlier period "despite very difficult trading conditions."

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