Poultry supplier not chicken about unlisted market

By NZPA

Wednesday 5th March 2003

Poultry supplier ProTen says it is not chicken about moving to the unlisted market -- it just hasn't found a broker to sponsor the company.

Coinciding with a $10.4 million capital raising, Feilding-based ProTen plans to move to the unlisted market before listing on the stock exchange's alternative board, the AX, which will be launched later this year.

However, chairman Alwyn Burr said ProTen had been turned down by brokers unwilling to sponsor the company on to the unlisted market as required.

"This process has proved to be difficult, and four broking firms which have been approached have declined to act in the sponsorship role, citing as the main reason the proposed changeover to the AX," Mr Burr said.

ProTen currently has about 150 shareholders who can only sell or buy shares privately. The company wanted to make its shares more tradeable by listing on the AX after the New Zealand Stock Exchange unveiled details last year.

"While we know there's going to be a change we believe that could be July/August, so what we thought we should do is go to the unlisted environment," Mr Burr said.

"That would get a market established for the shares, and then we could progress on as the stock exchange's (AX) came to fruition."

ProTen was not currently considering listing on the main board, because with a market capitalisation of $25 million it would be very small, but it might consider doing so in future, Mr Burr said.

The company has already issued a prospectus for its capital raising through lawyers Russell McVeagh and the Companies Office, and was hoping to move to the unlisted market within the next six weeks.

"There will be some additional formalities but according to the stock exchange, it's quite a simple matter," Mr Burr said.

ProTen is raising between $5 million and its target of $10.41 million to fund expansion in Australia through the issuance of shares and convertible notes. The offer closes on April 18.

Founded in 2001 by managing director Max Bryant, ProTen is New Zealand's biggest supplier to the local fast-food and broiler markets, and plans to expand in New South Wales and Victoria.

The new AX market will replace the underperforming New Capital Market, and the "unlisted" or secondary market.

The exchange's reluctance to continue facilitating the unlisted market may have created uncertainty among brokers, NZSE markets development officer Geoff Brown said.

"The issue from our perspective is that the unlisted market is unregulated ... "

There are about 55 companies on the unlisted market, ranging in capitalisation from $170 million to about $1 million.

Lengthy consultation with participants has delayed the launch of the AX, which the NZSE initially wanted up and running by the end of last year.

The exchange hopes to launch the AX with a minimum of 30 companies, expanding to 100, and raise $250 million within two years.

According to its prospectus, ProTen generated revenue of $1.37 million for the 14 months ended March 31, 2002, and posted a pre-tax surplus of $749,000.

The company expects revenue for the year ended March 2003 of $5.70 million and a pre-tax profit of $3.06 million, on the back of higher margins.

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