Monday 3rd March 2014
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New Zealand Refining raised $48 million in a placement of new shares at a 4 percent discount to give the nation's only oil refinery more funding flexibility as it invests in new capacity in the face of volatile refining margins and exchange rates.
The Whangarei-based company sold the shares to institutions after the close of trading on Friday at $1.68 apiece. The stock ended trading last week at $1.75 and has declined 15 percent this year.
NZ Refining said in a statement that its current debt funding facilities were sufficient to meet its capital spending needs, which include the $365 million Te Mahi Pou project, begun in 2012, to build a new continuous catalyst regeneration platform (CCR) at Marsden Point. The expansion is expected to lift the refinery's share of New Zealand's petrol market to 65 percent from 55 percent.
It will also offer existing shareholders the opportunity to buy up to $15,000 each of new shares via a share purchase plan, which has a record date of March 12 and opens on March 17.
"The combination of the placement and the underwritten component of the share purchase plan is a prudent move by the board to manage our balance sheet while we face lower New Zealand dollar refining margins coupled with the construction of Te Mahi Hou" chairman David Jackson said.
The placement was managed and underwritten by First NZ Capital, which is also underwriting the share purchase plan up to $5 million.
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