Massive demand for Infratil shares from mum and dad investors

Tuesday, 30 June 2020

Infratil, which owns a majority stake in Wellington International Airport, has raised $300 million to strengthen its balance sheet.

Infrastructure investor Infratil has successfully raised $50 million from retail shareholders.

The company, which owns a majority stake in Wellington International Airport among other investments, said the share offer was oversubscribed, so investors would have to accept fewer shares than they applied for.

Infratil said it received applications from existing shareholders for $131m of shares.

The NZX sharemarket-listed company launched its capital-raising plan in early June, telling shareholders it wanted to increase its share capital to strengthen the company's balance sheet, allow to it invest in its existing portfolio, and take up ''new opportunities that may arise as a result of current market conditions.'

* Wellington airport shareholder Infratil raising $300m

* Fletcher Building workers coming to grips with proposed 1000 job cuts

Fletcher Building chief executive Ross Taylor said the US debt would be repaid from cash reserves.

As well as seeking $50m from retail investors, Infratil raised $250m through a share offer to institutional investors like pension and KiwiSaver funds.

'This brings the total amount raised under the capital raising to $300 million, with proceeds to provide balance sheet flexibility to fund growth investments across Infratil's existing portfolio companies and take advantage of new opportunities that may arise as a result of current market conditions,' Infratil said in a statement on the NZX.

Infratil was not the only company with shares listed on the NZX to restructure its balance sheet as a result of the impact of the Covid-19 pandemic.

Fletcher Building, which has been working through a massive programme of job cuts, said it would repay US$300m (NZ$320m) of debt it owed to overseas investors out of its cash reserves.

Chief executive Ross Taylor said the debt, which it took on in 2012, was due to mature in 2022 and 2024.

Repaying it early would reduce Fletcher Building's funding costs by around $17m a year.

Many NZX- listed companies have been raising capital through share offers to retail and institutional investors since the Covid-19 pandemic hit.

They include Auckland International Airport, which has faced a massive drop-off of international air travel, and Sky Network TV, whose capital raising ended speculation it would struggle to repay bonds due for repayment next year.

Casino and entertainment company SkyCity also raised capital to strengthen its balance sheet.