St Laurence Property and Finance yesterday went ahead with a capital raising because its chief executive didn't believe it would be possible in six months' time.
The property company has reduced a planned $24.4 million rights issue of convertible notes to $18.19 million and cut the price to
70c for a note with a $1 face value from a signalled 75c. The sale has no underwriter.
The notes will trade on the unregulated Unlisted market because St Laurence could not provide information to the NZX in time for them to be listed there. The notes pay an effective yield of 12.9 per cent until they convert to shares in seven months' time.
When asked why the issue went ahead when market feedback for it has been mixed, chief executive Kevin Podmore said because in four or six months' time market conditions would be worse.
"That's my personal view, I'm concerned things are going to get worse rather than better," he said.
His comments came as global share markets fell on concern about financial institutions' exposure to the US property market.
Podmore said the NZX "dropped on us towards the end of February" a request for additional information before it would agree to listing the notes.
Most of that information was provided except for one item of prospective information. It would have taken time to provide the prospective information as it would have had to be audited and signed off by directors.
The company wanted to register the prospectus before March 31 because after that it would have had to provide audited accounts for the year ending 2008, which would have delayed the offer.
Almost all of the money raised will be used to develop buildings the company currently owns, particularly 139 Quay St in Auckland and 55 Molesworth St in Wellington.
The company had an unconditional heads of agreement with a tenant to take all the space in the Molesworth St building if it is redeveloped. The current tenant, the IRD, is moving out at the end of the year.
- NZPA
