25 Mar 2009

Nuplex share rebound on rights issue

1:04 pm on 25 March 2009

Shares in debt-laden resins maker Nuplex are continuing to reclaim lost ground after the company confirmed that it expects operating earnings of $43 million in the second half of the financial year.

By mid-Wednesday, it was up 13 cents, or 19%, to 81c, following on from a 28% jump on Tuesday.

It still has not clawed back the losses that followed news last week that Nuplex was abandoning a share placement because of a lack of interest from institutional investors.

Instead, it announced a fully underwritten seven-for-one rights issue to raise almost $133 million to reduce its balooning debt, which stands at $400 million.

Nuplex shares have been on an almost constant downward slide from the $3.10 they were trading at in mid-January.

The company has been suffering from a drop in demand and falling New Zealand dollar, but says its businesses remain profitable and lower raw material costs should increase its margins.