Several institutional investors have expressed an interest in Geoff Ross' new venture Ecoya, something he did not experience when he took his vodka label 42 Below to market.
On the back of 42 Below's success, Ross has pushed forward with his scented candle and bodycare business by taking it to market to raise capital to expand into international markets.
The target is $10 million, and already 500 former 42 Below investors have expressed an interest in Ecoya, worth an estimated $5 million, Ross said.
He credits 42 Below's international success and its sale to alcohol giant Bacardi in 2006 for the former shareholders' interest and support in Ecoya.
Investors have two more weeks to buy shares before the listing closes.
If the capital raising works it would be the first successful IPO (initial public offering) since Kathmandu listed six months ago.
Ecoya is going to rely heavily on its environmental accolades to sell its products to international markets, especially in the United States where New Zealand's clean green image is seen as a valuable commodity, Ross says.
"So far the listing is going very well. We are very confident the way the offer is going. We expect to be fully subscribed or oversubscribed within the next two weeks."
In early March, Ecoya wrote to former 42 Below shareholders about the company's pending IPO and offered them an opportunity to register their interest.
Ross, who is executive chairman, said Ecoya's directors had expected a fair amount of feedback from the former shareholders but did not expect the extent of their response.
"I did not expect it quite to that level, $5 million is a big chunk of our overall target."
A pool of $1.5 million of shares is available for public investors, while a pool of $2.5 million of shares has been set aside for independent directors and private investors.
Of that pool, The Business Bakery, which Ross runs with former 42 Below and current Ecoya directors Grant Baker and Stephen Sinclair, has underwritten $2 million of shares.
Stockbrokers Craigs Investment Partners and First NZ Capital are expected to take about $6 million of shares.
"Do the maths, it is likely the shares would be oversubscribed."
If this happens, the public pool of 1.5 million shares and oversubscription pool will be subject to scaling.
The products include a range of lotions, wax candles, soaps and body washes. They are available from Ballantynes, Smith & Caughey and gift and boutique shops such as Nest.
The company has strong plans to expand to the US East Coast and, through independent director Richard Frank, into the film and TV industry.
The offer closes on April 26.
Big interest in new float a surprise
Geoff Ross
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