Hellaby debt reduction outpaces forecasts

Hellaby Holdings reduced debt more than forecast in its latest year and said its balance sheet is strong enough to rule out converting capital notes to stock.

The company’s shares climbed more than 5%.The diversified group whose businesses range from footwear to auto parts and packaging said total net debt was $75 million at June 30, including $50 million of capital notes, Analysts who follow the stock had been expecting debt to be about $95 million, according to chief financial officer Richard Jolly.

The June 2011 notes will either be redeemed for cash of rolled over into new notes on maturity. The company had the option of converting the notes to shares under its trust deed.

“Hellaby’s balance sheet has been sufficiently reformed since 2008 for our board and management to signal our capital notes intentions early,” said managing director John Williamson.

“We have significantly de-risked Hellaby’s balance sheet and portfolio, and we can now plan the company’s future with greater confidence.”

Shares of Hellaby rose 8 cents to $1.60, valuing the company at $77.5 million. The shares would have converted at a slight discount based on a value weighted average price formula.

Core bank debt was $25 million at June 30, down 51% from a year earlier.

The company separately announced it has appointed Greg Batkin, a director of investment banking at Craigs Investment Partners, as chief investment officer.

Businesswire.co.nz

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