$17.8m more for Steel & Tube

LOWER HUTT: Steel & Tube Holdings sold leftover shares from a rights issue at a premium to what was a discounted offer, raising another $17.8 million to repay debt.

The Lower Huttbased company sold the shares at $1.23 each, matching the last trading price, and a premium to the rights offer’s deeply discounted $1.05 a share.

The steel products maker has now raised $80.9 million, which it will use to repay bank debt after breaching a lending covenant earlier this year when impairment charges and restructuring costs pushed it into the red.

‘‘We are confident that the capital raise, combined with the new mix of institutional investors, will result in improvements in value for longterm shareholders who have supported the company,’’ chairwoman Susan Paterson said in a statement.

‘‘The funds raised significantly reduce our debt and ensure that the company has the financial flexibility to pursue its business transformation initiatives.’’

Steel & Tube is overhauling its business under the leadership of Mark Malpass after a review this year uncovered legacy problems.

Managers now think it is on a more sustainable path and have said they are confident recent sales trends mean dividend payments can resume in the 2019 financial year.

Because the shortfall book build sale price was a premium to the rights offer, shareholders who did not take up their entitlements will be paid 18c for each share not taken up.

The payment of about $3.4 million will be made by Tuesday. — BusinessDesk