Nov. 12 (Bloomberg) -- Incitec Pivot Ltd., Australia's largest fertilizer maker that today reported record profit, plans to sell A$1.17 billion ($773 million) in stock to existing share holders to refinance debt and pursue growth projects.

The company aims to sell A$819 million in shares to institutions and as much as A$351 million to individual investors, Melbourne-based Incitec said today in a statement. They're being offered at A$2.50 each, 40 percent less than the last traded price.

Companies globally are selling stock to shore up capital and cut borrowings as a worldwide credit squeeze crimps access to debt. The sale will enable Incitec to repay the balance of a A$2.4 billion bridging loan raised for the June purchase of explosives maker Dyno Nobel Ltd., Chief Executive Officer Julian Segal said.

``Companies are finding it easier to sell shares rather then go to the street for cash,'' Dominic Vaughan, a senior dealer at CMC Markets, said by phone from Sydney. ``If it's a good stock, it will get picked up quite quickly.''

Incitec last traded at A$4.14 on the Australian stock exchange on Nov. 10. Trade will remain halted until the sale of new shares to institutions is completed tomorrow.

Credit Suisse Group AG and UBS AG are managing the sale.

Incitec is selling stock after National Australia Bank Ltd. this week sold A$3 billion in new shares to shore up capital, 50 percent more than initially planned. Sonic Healthcare Ltd. said today it plans to raise A$350 million selling new shares and Minara Resources Ltd. plans to sell A$120 million in stock.

Raising Shock

``The size and discount of this raising has come as a shock,'' ABN Amro Morgans Ltd. analysts Belinda Moore and Sam Turner said today in a note to clients. ``Raising capital at such a deep discount, whilst disappointing, will complete Incitec's refinancing and leave it with a solid balance sheet to pursue further growth opportunities.''

Credit market dislocation prevented the planned sale of $500 million in debt in the U.S., Incitec said in an investor presentation. The company secured a A$1.68 billion three-year, syndicated bank loan in September from 11 banks, replacing about two-thirds of the bridging loan, which matures in May.

``The capital raising secures our strong balance sheet and positions us for future growth in key fertilizer and industrial explosives markets,'' Segal said in the statement. ``We remain confident about the future notwithstanding the uncertainty in the global financial environment.''

Net income almost tripled to a A$614.3 million, or 57.4 cents a share, in the 12 months ended Sept. 30, from A$205.3 million, or 20.4 cents a year earlier, Incitec said today. Profit was boosted by higher fertilizer prices and earnings from the A$2.7 billion Dyno acquisition. Sales more than doubled to A$2.9 billion.

Fertilizer Output

Incitec will target cost savings of $204 million by 2011 as it integrates the Dyno explosives business, it said.

Funds raised from the share sale will also be used for projects to lift fertilizer output at the company's Gibson Island and Southern Cross plants, and for the Moranbah ammonium nitrate project, Incitec said. It won't be used for an acquisition, CEO Segal said on a conference call with reporters.

Construction of the A$935 million Moranbah project in Queensland state is on time and on budget, Chief Financial Officer James Fazzino said on the call. The company, the biggest supplier of industrial explosives in North America, isn't seeing any cut backs in orders for them, he said.

``If you want to turn on the lights in the U.S., you've got to use our explosives to blow the coal up so you can produce the power,'' Fazzino said. ``That means we've got a very stable demand for our explosives in the U.S., which is where the business is largest.''

The company, which expects earnings ``momentum'' to continue this year, will pay a final dividend of 19.5 Australian cents, bringing the total 2008 dividend to 29.7 cents, it said.

To contact the reporter on this story: Madelene Pearson in Canberra on mpearson1@bloomberg.net; Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net

Last Updated: November 12, 2008 00:41 EST