Wool Services sale boosts Hellaby's cash pool

Investment company Hellaby Holdings will soon have a cash pool of $75 million with which to go shopping for new assets.

The company yesterday announced an agreement to sell its 19.85 per cent stake in NZAX-listed scouring company Wool Services for $6.9 million.

That combines with $13.6 million from the sale of its stake in clothing chain Rodd & Gunn in April and the $50 million it plans to raise in capital notes.

Hellaby is also in the process of selling some non-strategic property assets which should raise at least a further $4 million.

Managing director David Houldsworth said it was possible the company could use the cash to buy something big but, at this stage, it was investigating two or three businesses in the $5 million to $6 million range.

Those potential purchases - in the automotive and industrial sector - were still at an early stage and no due diligence had yet been done.

Hellaby still owns several companies, including The BBQ Factory, Hannahs, Brake & Transmission New Zealand, Diesel Distributors and Levana Textiles. It has stakes in the Number 1 Shoe Warehouse and Bombay Petfoods.

The Wool Services stake was sold to Woolpak Holdings for 50c a share. Hellaby said the sale would translate to a profit of $1.3 million on its original investment. Hellaby's shares closed down 6c at $4.53.