Resins to lift Nuplex profit

Nuplex's sales revenue is expected to grow about 70 per cent and operating earnings more than 40 per cent as a result of buying the coatings resins business of Akzo Nobel in the Netherlands.

The company told shareholders at a meeting in Wellington yesterday to approve a share raising to pay for the deal that even with the number of shares issued increasing 20 per cent, and the cost of additional borrowings, earnings per share would be 10 per cent higher.

Shareholders are being offered the shares at a 3.5 per cent discount, in a bid to raise up to $15 million.

Nuplex has already partly funded the $202 million purchase through a $56 million private placement of 11.6 million shares to Australian and New Zealand institutional investors.

Managing director John Hirst said Nuplex's reputation, an appreciation that it would be a reliable strategic supplier, and good chemistry between the management groups were key elements in winning the bid at a lower price.

- NZPA