Feltex plots sharemarket listing

By PAUL PANCKHURST

Feltex Carpets is planning a $50 million bond issue as a first step towards a return to a sharemarket listing for the one-time manufacturing icon.

Market sources say Feltex is planning a "Vector-style" issue - fixed-interest notes with terms linked to a plan to list on the Stock Exchange within two years.

The funding from the bonds would replace ANZ Bank debt.

The bonds would sit behind bank funding in terms of the pecking order over the company's assets.

Feltex is a heartland New Zealand employer, reported to have more than 1000 staff spread across places such as Dannevirke, Feilding and Foxton, as well as Christchurch, Wellington and Auckland.

Another 800 to 900 staff are in Australia.

The company's annual revenue is more than $300 million.

Sharebroking firm Forsyth Barr is sounding out broker interest.

Managing director Neil Paviour-Smith said restrictions on pre-offer publicity prevented him saying much. "I can say that we are going through the normal pre-marketing and we will certainly be in a position to make a statement early next week."

Feltex Carpets is owned by a private equity fund of investment bank Credit Suisse First Boston.

The company's roots go back more than 50 years.

In the mid-1980s Feltex was a listed conglomerate of many businesses, with 8000 staff.

It became one of the investments of Equiticorp - the bull market behemoth that turned bear market basketcase.

Britain-based BTR Nylex bought the carpet interests from Equiticorp's statutory managers in 1989 and then, in 1997, CSFB became the majority owner.

Feltex bought the Australian carpet interests of Shaw Industries for $149 million in March 2000 - an acquisition that proved difficult to digest, with the company reporting losses in the 2001 and 2002 financial years.

Chief executive Sam Magill is from the Shaw side of the business.

The sales pitch for the offer is a story of a dramatic turnaround.

But because of Feltex's recent history, brokers and investors may take some convincing.