By Nicholas Bryant and Nick Stride
Friday 13th October 2000
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FCL directors have cunningly side-stepped the necessity of getting 75%-plus approval from the division's shareholders by keeping Fletcher Forests within the old group structure.
That approval will have to be obtained from Fletcher Building and Energy shareholders, whose divisions are being separated.
Stripped of the division's biotech intellectual property, which will be shuffled into new vehicle Rubicon, Fletcher Forests shareholders will be left with nothing but trees. They are also being asked to dig into their pockets to support a $427 million rights issue at a heavily discounted 25c.
Investors this week voted with their feet, sending Forests shares plummeting. These have fallen 46% from their October 2 level of 81c.
Fletcher Building holders shared the pain as a market disappointed with the evaporation of a trade sale slashed the shares' value by 14%. Fletcher Energy shareholders got the best of the deal with an offer worth around $11.22 a share. But its value next year when shareholders receive their cash and shares is uncertain.
All eyes are on Capstone Turbine, the FCL star investment whose shares are the key to the breakup.
New vehicle Rubicon will be relying on an allocation of three million Capstone shares to support its part in the Fletcher Forests recapitalisation.
Capstone shares have been on a rollercoaster. Since listing on the US Nasdaq market they have been as high as $US82.
The Nasdaq index slid on Wednesday, losing 3.4% of its value in an echo of April's "tech wreck." But Capstone went against the tide, gaining $US6 to $US49.
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