Tower Ltd. (TWR), a New Zealand insurer and fund manager, will raise NZ$81.3 million ($57 million) from a rights offer to bolster its balance sheet and provide funds for expansion.
Investors will be offered five new shares for every 16 held at NZ$1.34 apiece, the Auckland-based company said in a statement. The offer is fully underwritten by Goldman Sachs JBWere Ltd. and 35 percent shareholder Guinness Peat Group Plc (GPG) plans to take up its full entitlement, Tower said.
Tower in March raised NZ$82 million from the sale of five- year bonds to pay maturing debt, and expects full-year underlying profit will meet market expectations, Chief Executive Officer Rob Flannagan said today. Underlying profit, which excludes the effect of changes in discount rates, rose 5 percent to NZ$21.5 million in the six months ended March 31.
“The capital raising is consistent with Tower’s strategy for business growth,” Flannagan said. “The additional capital will provide support for organic growth and enhance the group’s financial flexibility to take advantage of strategic opportunities that may arise.”
Tower shares fell 7 cents, or 3.9 percent, to NZ$1.74 at the 5 p.m. close of trading in Wellington.
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