Steel & Tube raises $42.3m, seeks another $17.8m

LOWER HUTT: Steel & Tube Holdings says 71% of its 1for1.9 pro rata rights offer has been taken up by shareholders and the stock has been halted for a shortfall bookbuild to raise another $17.8 million.

Shareholders bought about $42.3 million of new shares at $1.05 in the offer, a 28% discount to the $1.46 price they were trading at before the announcement. The shares closed at $1.23 on Tuesday, having dropped 37% so far this year.

The uptake ‘‘represents about 70.7% of the new shares available to eligible shareholders under the rights offer. In addition, applications totalling approximately $5.6 million were received for additional new shares attributable to rights not taken up,’’ Lower Huttbased Steel & Tube said in a filing to the stock exchange.

The offer is part of an $80.9 million capitalraising to shore up the balance sheet after a major restructure. A $20.8 million placement was completed on August 7 with strong support from existing and new institutional investors.

While Steel & Tube needed a waiver from its banks earlier this year after it breached at least one lending covenant, last month the company said it expected to resume dividends as restructuring began to pay off.

A shortfall bookbuild was being conducted by First NZ Capital Securities yesterday.

The new shares under the rights offer are expected to be allotted on September 7. — BusinessDesk