Fletcher shortfall bookbuild cleared at premium to offer price; trading to resume today

Friday 20th April 2018

Fletcher Building completed the institutional component of its $750 million capital raise, with investors paying a premium to the discounted offer in a bookbuild to clear the leftover entitlements.

Investors took up the remaining 2.2 million entitlements in the bookbuild at a clearing price of $6.15 apiece, more than the $4.80 entitlement offer and the theoretical ex-rights price of $6 a share, Auckland-based Fletcher said in a statement. The institutional component of the capital raise has generated gross proceeds of $515 million, with a 98 percent take-up meaning there was a limited number in the shortfall bookbuild.

Fletcher's shares resume trading today, having been halted at $6.27 ahead of the capital raise. The funds raised from the pro-rata one-for-4.46 accelerated entitlement offer at $4.80 a share will go towards repaying debt as the construction and building products company seeks to strengthen its balance sheet.

The stock has dropped 18 percent so far this year as cost blow-outs from its Buildings + Interiors division breached its banking covenants, and the firm is still in talks with its US Private Placement noteholders.

Fletcher also plans to sell its Formica and Roof Tile Group international businesses, withdrawing to the Australia New Zealand region, which Morningstar Research analysts estimate are worth about $700 million.

The retail component of Fletcher's capital raise opens on April 23 and closes on May 11, and will be followed by a bookbuild for any entitlements not taken up.

(BusinessDesk)

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