Rubicon says ArborGen capital raising will reduce its stake

Wednesday 27th April 2011

Rubicon's holding in biotechnology company ArborGen Inc will fall to 27.24% from 33.33% when ArborGen carries out a capital raising.

ArborGen wants to raise new capital by selling 5.12 million new shares to the public at between US$16 (NZ$20) and US$18 per share. The share sale will raise between US$82 million and US$92 million.

Rubicon was formed out of the separation of the Fletcher Challenge Group and owns a stake in Tenon, shares in Capstone Turbine Corp and the stake in ArborGen.

ArborGen said last October that it had filed a registration statement with the United States Securities and Exchange Commission relating to the proposed initial public offering of its common stock and at that time the number of shares and the price range had not been determined.

Rubicon has said it was considering the longer-term funding options for ArborGen, in order to take the high-growth business to its next level of development.

Rubicon said when releasing its interim report that industry standard loblolly pine seedling in the US typically takes around 23 years to grow to maturity, and only about 25% of the log can be processed into high-value lumber. ArborGen's trees can produce 55% of high-value lumber.

ArboGen is also trying to reduce the time it takes for a loblolly pine tree to reach maturity to 15 years.

NZPA

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