Fisher & Paykel Appliances Holdings Limited (Fisher & Paykel) has announced a $NZ189 million ($149 million) fully underwritten equity raising, backed by cornerstone investor Haier Group Corporation (Haier).
Freehills is acting as Australian legal counsel to Fisher & Paykel, Bell Gully is Fisher & Paykel's NZ counsel. Clayton Utz, led by partner John Elliott, is acting for Haier.
The capital raising, aimed at reeling in Fisher & Paykel's debt margin, will be via a 1-for-1 pro-rata renounceable entitlement offer at $NZ0.41 per share, for institutional and retail investors.
Significantly, the raising will also involve a cornerstone placement to Haier, giving the Chinese white goods manufacturer a 20 per cent stake in the company.
Freehills partner Tony Sparks said the cornerstone element of the deal is part of a relatively recent trend in the capital raisings market. Other examples include GIC Real Estate's investment in GPT, and Goldman Sachs Private Equity investment in AJ Lucas Group, both of which Freehills also advised on.
"[There is] a growing trend of cornerstone investors participating in significant capital raisings, and I think the reason we are seeing this development is because of the significant support [that] having a cornerstone investor involved in the offer brings to the issuer," Sparks explained.
"It's pretty clearly an endorsement of the companies' prospects to have that cornerstone investment as part of the raising and it provides guaranteed funds for that part of the offer."
This is only the second example of a major capital raising utilising the new low doc offer regime in Australia under section 708AA of the Corporations Act, with the New Zealand offering made under a regulated document.
"The Corporations Act was amended recently to allow mutual recognition of offerings in Australia and New Zealand , and under those provisions you should be able to use a single offer document governed by either jurisdiction", Sparks said.
"However, the provisions don't work well in a rights issue context and issuers are looking at various alternative work-arounds."
The Freehills team, led by Sparks, was supported by partner Philippa Stone and lawyer Steve Drummond. Deutsche Bank AG and First NZ Capital Securities Limited are acting as joint lead managers and underwriters to the entitlement offer.
"Deutsche Bank, First NZ, Bell Gully and Freehills all had to move very quickly to settle the arrangements with the cornerstone investor, and the offer more generally, in order to come to market promptly," Sparks said.
-By Laura MacIntyre