Troubled resin maker Nuplex is being investigated by the Securities Commission and NZX over whether it breached continuous disclosure rules in relation to its breach of banking covenants.

The company’s share price has tanked 48.6% to 55c in late morning trading today after it announced the cancellation of an institutional placement and the issue of more than 500 million shares in a seven for one rights issue at the rock bottom price of 23c.

The underwritten rights issue is set to raise up to $150 million, which will be used to pay down debt.

Nuplex buried the news of the continuous disclosure investigations in a lengthy stock exchange announcement about the capital raising.

In early February, analysts were warning that the company was in danger of breaching banking covenants after it cut its earnings forecast.

The company did not confirm it was in breach until two weeks later, when it admitted its problems in response to a stock exchange share price enquiry.

At that point it said: "The speculation from First NZ Capital that there may be a breach of bank facility covenant is not, in fact, inaccurate so the market is not misinformed.

"The request made of the banks [to loosen the covenant] is not of itself material information given that the lower ebitda has already been disclosed.”

It seems that NZX and the Securities Commission might have a different opinion.

“Nuplex has been advised by NZX Regulation that an investigation is being conducted with regard to Nuplex's compliance with continuous disclosure obligations in relation to its failure to comply with the senior debt cover ratio covenant in its bank facilities as at December 31 2008.

“This investigation was not concluded at the date of this document,” Nuplex said in today’s stock exchange announcement.

“The Securities Commission has also requested that the company provide material to it.”

Nuplex shares traded for more than $6 less than a year ago.

This morning’s announcement saw the end of the trading halt that began on Monday and was originally due to last until Wednesday, before being further extended to the end of trading yesterday.