Millennium & Copthorne Hotels New Zealand [NZX: MCK], which operates 22 hotels across the country, is seeking about $112 million in a preference share issue to support a capital raising by its Chinese investment unit ahead of a proposed float, to repay debt and refurbish properties.
The Auckland-based company is offering 1 preference share for every 2 ordinary shares at an issue price of 64 cents each. The preference shares rank equally with ordinary shares for dividend entitlements, but won't have any voting rights. Eligible shareholders will be able to apply for any preference shares not taken up by other investors.
Millennium anticipates about $60 million raised will go towards supporting a capital raising by First Sponsor, which has property development interests in China, to fund further development in Chendgu City, Sichuan Province, and new land acquisitions in Dongguan City, Guangdong Province, and to prevent having its investment diluted.
That comes as First Sponsor prepares an initial public offering of one of its own subsidiaries this year on the Singapore Exchange. If the float goes ahead and Millennium retains its existing stake in First Sponsor, it anticipates holding about 31 percent of the new listed company.
Millennium plans to spend about $40 million raised on repaying bank debt, with the rest put towards refurbishing hotels in Auckland and Palmerston North.
Last week the company reported a 37 percent drop in 2013 profit to $32.2 million, reflecting one-off earthquake-related insurance payments the year before.
The shares fell 1.5 percent to 65 cents today, and have shed 7 percent this year.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Housing stats show just about everything's getting worse
- Sir Bob Jones: Why the newspaper industry is deservedly dying
- Adobe, Microsoft, Google signal price rises from Oct 1 as GST net thrown wider (thanks, Spark)
- Air NZ reiterates warning to shareholders of increased competition
- ACC buys high, sells low as Intueri surprises investors with cascade of bad news
Most listened to
- Week in Review: a wrap of NBR Radio's top stories, interviews and analysis
- Matthew Hooton: Little leaves centre wide open for Peters and Greens
- ASB's Kim Mundy and Realestate.co.nz's Vanessa Taylor on the latest housing statistics
- Rob Hosking: Winston’s hour is coming
- Hunter's Corner: High stakes for both sides of Warminger case