Resins manufacturer Nuplex is now seeking to raise $132.8 million in a fully underwritten rights issue that will offer seven new shares for every existing share at the rock bottom price of 23 cents.

The shares immediately tanked, falling 67c (62.6%) to 40c once a trading halt was lifted.

Further details on the rights issue will be revealed early next week, but Nuplex says it will be fully underwritten by First NZ Capital Securities, with the resin manufacturer also entering a call option arrangement with the financial company.

The issue price of 23 cents is less than a quarter of the $1.07 it was frozen at on Monday and under 4% of what the stock was worth in the middle of last year.

Nuplex’s original plan to raise $110 million through a rights issue and placement has been scuttled, with the company deciding not to proceed with the planned placement in favour of the new deal after reportedly failing to reach agreement with institutional investors.

Under the top-up placement plan announced along with the amended rights issue, in the first five days of the allotment of shares under the rights issue, First NZ Capital Securities may call for Nuplex to issue to habitual and institutional investors who provided sub-underwriting commitments up to 15% of the shares then on issue for the 23c share price.

The company’s bid to raise capital to get through to an inevitable turnaround in demand for its products has been watched closely by other businesses launching their own capital raising schemes.

If a company like Nuplex, which is still producing a profit and has a good global grip on the resin market, could run into trouble raising a relatively modest $110 million, it might be a forecast of similar troubles for other companies in dire need of capital which may have a few more red numbers in their books.

This morning’s announcement sees the end of the freeze on share trading, which began on Monday and was originally due to last until Wednesday, before being further extended to the end of trading yesterday.

It’s highly unlikely it will quickly rebound to the levels seen during the middle of last year, but at the other end, there isn’t much room for it to fall any further.