NZ Stocks:Tranz Rail market focus as rights roll

By ELLEN READ

Interest in Tranz Rail will continue to dominate the market this week.

Despite reaching agreement with one of its bankers late last week over a complex refinancing deal, the pressure remains on the national rail and ferry operator.

Its shares closed at $1.25 on Friday, well down on the year high of $4.32.

Citibank had threatened to derail the refinancing deal because of a disagreement over a foreign currency hedging deal linked to the inter-island ferry Aratere.

The eventual agreement - whereby Tranz Rail agreed to Citibank's demands to break a US$88 million ($175 million) hedge - means the company can go ahead with today's $66 million rights issue to raise money to pay off debt and provide extra security to the Aratere's United States owners.

The books closed on the rights issue on Friday and they become tradeable today.

Troubled newcomer plastics manufacturer Vertex releases its first-half result on Wednesday.

Vertex listed on July 1 but the company's shared price was savaged just 9 1/2 weeks later as the company issued a profit warning on September 4.

The warning said the company's revenue for the six months to September 30 was expected to be $4.6 million down on the $46.3 million forecast in the prospectus.

It said the company had experienced a poor second quarter. On the revenue side, it cited lower-than-expected sales for its two "non-core" businesses, the injection moulding operation Technical Injection, and the smaller Securefresh, a business in the meat packaging field.

The Securities Commission is probing Vertex's initial public offering and unexplained movements in its share price, while the Stock Exchange market surveillance panel is looking at compliance with listing rules.

Despite these woes, the company's share price hit a two-month high of $1.30 last week.

Another company which has had its problems - Air New Zealand - will also be the focus of attention, as market watchers look for more detail on the proposal for Qantas to take a significant stake in the airline.

The annual meeting glut also continues this week, although none of this week's offering - Michael Hill, The Warehouse, NZ Oil and Gas or Wellington Drive Technologies - is expected to be contentious.