KEY POINTS:
Fisher & Paykel Appliances could still forge ahead with a plan to sell an issue of capital notes this year, despite the weak appetite for debt among investors.
Chairman Gary Paykel had announced the proposal at the whiteware maker's annual shareholder meeting in August. The issue of capital notes into the New Zealand market could take place this month, according to Reuters, citing a market source. The news agency reported the programme, expected to amount to around $100 million, was being arranged by Deutsche Bank.
The company's Paul Brockett, however, said no decision has yet been made. The proposal was still before the board, but could still potentially take place this year, he said.
Asked if it might be a strange time to solicit additional funds, Brockett said, "suppose it's opinion really".
He said there was not an issue with their existing bank debt facilities nor with liquidity at its finance arm.
"It's really just for diversification of funding - the board thought it was prudent to have other options available to them, especially given this economic climate."
Capital notes are typically unrated unsecured subordinated debt that converts after five years into ordinary shares or cash. Market commentator Arthur Lim said while market conditions may be tough, South Canterbury Finance and Marac had shown that it was still possible to raise money, albeit in their cases it was via a bonds issue.
"I think in the New Zealand market, established names with credibility can still attract money."
Plans to sell Fisher & Paykel's finance arm failed earlier this year after the company failed to find a suitable buyer. The move had been prompted by a number of unsolicited expressions of interest for F&P Finance, which at the time had a book value of more than $200 million.
The finance business, which includes the Farmers finance division acquired in 2003, contributed a normalised operating profit of $26.9 million before interest and tax for the last financial year.
Shares in Fisher & Paykel Appliances closed up 6c to $1.66.
