Nuplex trading halt extended as capital raising continues

Nuplex needs $110 million as part of a deal with banks to reduce its debt. Photo / Kenny Rodger

A trading halt on the shares of resin and chemical maker Nuplex Industries is being extended to enable the company to finalise a capital raising process.

The extension follows reports that major institutions were told last night that Nuplex's book building process would not be completed in time for today's market opening.

Trading in Nuplex shares was halted on Monday as a book build process started after the company announced it was planning to raise $110 million.

The funds are being raised through a placement of new ordinary shares to institutional and habitual investors, and a pro-rata renounceable rights issue of new ordinary shares to existing Nuplex shareholders.

Under an agreement with Nuplex's banks, net proceeds from the planned capital raising will be applied to reducing amounts outstanding under senior debt facilities.

Nuplex also said on Monday that talks with the banks had been successfully concluded, and various amendments to the senior debt facilities with the banks agreed.

Previously it said it failed to comply with a covenant requiring debt of no more than three times ebitda (earnings before interest, tax, depreciation and amortisation) as at December 31.

If the planned capital raising is not completed, Nuplex said it would be subject to a further review by the banks of their banking covenants.

Today Nuplex said the trading halt would remain in place until the earlier of the close of trading tomorrow, or when Nuplex notified the stock exchange of the outcome of the book build and placement.

- NZPA