ArborGen pulls capital raising

ArborGen Inc, a forestry biotechnology company 33 percent owned by NZX-listed Rubicon Ltd, has pulled an initial public share offer in the United States, citing market conditions as a reason.

ArborGen Inc, a forestry biotechnology company 33 percent owned by NZX-listed Rubicon Ltd, has pulled an initial public share offer in the United States, citing market conditions as a reason.

ArborGen wanted to sell 5.12 million new shares to the public at between $US16 ($NZ20) and $US18 per share to raise between $US82 million and $US92 million. Rubicon Ltd's holding in ArborGen was going to fall to 27.24 percent from 33.33 percent if the capital raising proceeded.

Arbogen said today that its owners International Paper, MeadWestvaco and Rubicon, in conjunction with Goldman, Sachs&Co and Citigroup Global Markets Inc, who were acting as joint book-running managers for the offer, have decided not to proceed with it.

The partners will consider a mix of continued annual partner funding, existing debt facilities, and if required, the injection of new external capital.

"All three partners remain committed to the future success of the company, and an ArborGen IPO will be reconsidered in the future, when market conditions are more favourable," the company said.

Rubicon was formed out of the separation of the Fletcher Challenge Group and owns a stake in Tenon, shares in Capstone Turbine Corp and the stake in ArborGen.

ArborGen develops trees which grow faster and produce more lumber when harvested.