Shares set at $ 1.12 for NZ King Salmon IPO
Shares in New Zealand King Salmon have been set at $ 1.12, near the bottom of a $ 1.10 to $ 1.20 indicative range, following a bookbuild with fund managers and brokers.
With the bookbuild completed, the Nelson- based firm yesterday lodged a product disclosure statement for an initial public offering of 69.2 million ordinary shares.
Chairman John Ryder said shares had been allocated to institutions in Australia, New Zealand and Hong Kong, local iwi and a number of brokers on behalf of retail clients.
“Naturally we are delighted New Zealand investors have demonstrated strong support for the initial public offering with demand exceeding the size of the offer at the final share price,” Ryder said.
The $ 1.12 offer price gives King Salmon a theoretical market capitalisation of $ 154.5m, if the offer is fully subscribed.
The company, which will list on the NZX and Australia’s ASX next month, is looking to raise up to $ 77.5m through the deal. That includes $ 30m in new capital, which will be used to pay down debt and fund infrastructure investments.
Investor Direct Capital is selling up to $ 45m of shares, while major shareholder Oregon Group is reducing its shareholding to about 40 per cent, selling $ 800,000 of shares into the offer.
Other minority shareholders are selling up to $ 1.7m of shares, the company said.
King Salmon operates eight sea farms in the Marlborough Sounds, which harvest and process more than 6000 tonnes of salmon Hallenstein Glasson annually. Three new sea farms, for which the firm received consents in 2014, are expected to double annual production, the company said.
King Salmon, whose brands include Ora King and Regal, has forecast operating earnings before interest, tax, depreciation and amortisation ( ebitda) of $ 19.2m for the year to June 30, 2017.
Revenue is expected to reach $ 130.1m in the same period.
Dividends of $ 5m are expected to be declared in the 2017 financial year, rising to $ 5.6m in 2018. That implies gross dividend yields of 4.5 per cent and 5 per cent, respectively. A broker firm offer opens on October 3. A priority offer of $ 1.5m worth of shares is also available to eligible residents in the Marlborough and Nelson Bays regions, the firm said.
The offer is being managed by First NZ Capital and Macquarie Capital.