Fletcher Building outlines $642 million equity raising
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The news: Fletcher Building has launched an equity raising as its new CEO moves to repair the embattled building products supplier’s balance sheet.
The numbers: The dual-listed Fletcher said it will raise NZD700 million ($642 million) by way of a NZD418 million rights share issue and a NZD282 million placement with institutional shareholders.
The equity raising will be at a fixed price of NZD2.40 per new share, representing a 17% discount to Fletcher’s closing price of NZD2.89 on Friday. The rights issue will be at a ratio of one for every 4.49 share held, on a pro-rata non renounceable basis.
The context: Fletcher said the equity raising was being undertaken as a prudent measure to strengthen the company’s balance sheet and improve financial stability and resilience in the current challenging environment.
Last month, Fletcher confirmed that WA home builder BGC had filed legal proceedings against subsidiary Iplex Pipelines Australia in relation to the Iplex Pro-Fit Pipes issues that have plagued homeowners.
The issue comes as Fletcher faces other regulatory troubles in New Zealand, where the NZCC also opened legal proceedings against the company over volume rebates. The building products supplier reported a worse-than-expected full-year net loss of NZD227 million ($207 million).
What they said: “We believe the equity raising bolsters our financial position, assisting us to better endure near-term market headwinds,” incoming CEO Andrew Reding said.
The source: ASX announcement
