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Friday 1st October 2010 |
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Hellaby Holdings shareholders oversubscribed for the rights issue at a deep discount, allowing the diversified group to strengthen its balance sheet and contemplate acquisitions.
Investors applied for $30.7 million of stock under the 3-for-7 issue, more than the $28.4 million sought. The company will stick to its original target, issuing 21.85 million shares at $1.30 apiece, which was a 30% discount to its price at the time it was announced.
The shares changed hands today at $2.
“The level of oversubscriptions is a positive endorsement of the support for Hellaby and its strategy,” said managing director John Williamson, in a statement.
As well as the discounted price, shareholders were probably encouraged by the group’s jump in annual profit to $10.3 million from $707,000 in 2009, even as weak consumer demand drove sales down 4.8%.
The issue was underwritten by cornerstone investor Castle Investments, which will keep its 30.5% stake, and brokerage Forsyth Barr.
The new shares will be issued on October 1.
Chairman John Maasland has said the board expects to add at least one bolt-on acquisition in the year ahead, probably in selected automotive, industrial or distribution sectors.
Businesswire.co.nz
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