News
Rubicon capital raising marks first for New Zealand
Bell Gully has advised Rubicon Limited on a comprehensive funding plan for its business including use for the first time in New Zealand of a specific capital raising structure.
The funding plan, incorporating a mix of bank and shareholder funding, secures the company's cash needs, under normal operating parameters, through to the end of 2011.
Bell Gully corporate partner Brynn Gilbertson, a finalist for the New Zealand Dealmaker of the Year at the ALB Australasian Law Awards next month, advised Rubicon on all aspects of the plan. He was assisted by solicitor Jennifer Coote.
The equity component of Rubicon's funding plan raised NZ$21 million from the company's existing shareholders under a pro-rata entitlement, comprising two separate offer tranches – an accelerated initial offer that was open only to substantial shareholders and a subsequent retail offer open to all other eligible shareholders.
Rubicon's capital raising was the first offer in New Zealand to use a simultaneous accelerated renounceable entitlement offer (SAREO) structure. This enabled the company to proceed with its capital raising without incurring the cost of having the offer underwritten and allowed all shareholders, who did not participate in the offer or were ineligible to do so, to realise the same premium through the successful book build process that followed the retail offer. A SAREO structure has recently been used in Australia by CSR and Lend Lease.
Brynn Gilbertson says it was also crucial for the offer to be structured in a way that allowed Rubicon's large US-based institutional shareholders to take part in the offer within the bounds of US securities laws and the New Zealand Takeovers Code. This was achieved and the new shares began trading on the NZSX on 1 April 2010.
As well as the share offer, Rubicon entered into a new US$15 million bank facility with ANZ National Bank to meet future potential funding needs.
