Fletcher Building raises $515m of $750m offer: now over to retail investors

Fletcher Building has raised $515m of its $750m offer. Photo/Natalie Slade

Fletcher Building has raised $515 million of its planned $750 million offer to shareholders by hugely discounting new shares, announcing this morning it had filled most of the offer it revealed on Tuesday.

Retail investors now have from Monday till Friday next week to take up the offer, aimed to take the capital raising programme to the target $750m.

The business announced on Wednesday that it had raised $500m and today said it had got $515m, leaving the remaining shares in offer to be bought by retail shareholders.

On Wednesday, an NZX notice said: "Fletcher Building received strong support from existing institutional shareholders with eligible institutional shareholders electing to take up approximately 98 per cent (subject to change due to ongoing shareholding reconciliations) of their entitlements under the institutional entitlement offer."

The stock will begin trading on the NZX and ASX this morning, after going into a trading halt this week, giving more of an indication of how the market sees the troubled company.

"Fletcher Building is pleased to advise the successful completion of the institutional shortfall bookbuild of its $750m fully underwritten pro-rata accelerated 1 for 4.46 entitlement offer of new Fletcher Building shares," it told the NZX today.

"The gross proceeds raised in the institutional entitlement offer and institutional bookbuild has increased to approximately $515 million," it said this morning, following Wednesday's notice.

Fletcher sold its new shares at a discount of around 23 per cent to the price the stock was trading at on Monday.

"The institutional shortfall bookbuild of 2.2 million entitlements was well supported by eligible institutional shareholders and new investors," the company said.

"Fletcher Building shares are expected to resume trading on the NZX and ASX today," it said.

Shareholders with questions about the offer are being encouraged to telephone 0800 650 034.

Fletcher Building completed the institutional component of its $750 million capital raise, with investors paying a premium to the discounted offer in a bookbuild to clear the leftover entitlements.

Investors took up the remaining 2.2 million entitlements in the bookbuild at a clearing price of $6.15 apiece, more than the $4.80 entitlement offer and the theoretical ex-rights price of $6 a share, Auckland-based Fletcher said in a statement.

The institutional component of the capital raise has generated gross proceeds of $515 million, with a 98 percent take-up meaning there was a limited number in the shortfall bookbuild.

Fletcher's shares resume trading today, having been halted at $6.27 ahead of the capital raise. The funds raised from the pro-rata one-for-4.46 accelerated entitlement offer at $4.80 a share will go towards repaying debt as the construction and building products company seeks to strengthen its balance sheet.