Building products company Steel and Tube is raising nearly $81 million through a share issue to pay down debt.
Steel sitting in a yard in an industrial area. Photo: RNZ / Cole Eastham-Farrelly
The company plans to sell shares to institutional and current investors at a discount so it can eliminate much of its debt of more than $100 million.
One of the early casualties of the construction sector's woes, the company has been through a significant restructuring; selling parts of its business, property, and writing down asset values.
Chief executive Mark Malpass said action has been taken to turnaround the business, and raising capital will allow it to move on with its plans.
"It will bring our debt levels down to an acceptable level ... and take the debt presure off the business, and allow us to execute our plans."
The new shares are being sold to institutional investors at $1.15 each, while existing shareholders will be offered one new share for every 1.9 they now hold at $1.05 each, a 28 percent discount.
The company will not pay a final dividend this year.
However, the company is expecting a slightly smaller operating loss for the year just finished of $36.2m, rather than the forecast $38m loss.
Steel and Tube expects to earn $25m this financial year and up to $40m by 2021.
