August 20, 2019 / 1:03 AM / 3 months ago

UPDATE 2-Napier Port soars on debut as investors toast rare New Zealand listing

* Stock hits boards at NZ$2.91 vs NZ$2.60 IPO price

* Co plans to use proceeds to reduce debt, fund new wharf

* Second listing on NZX this year after Cannasouth float in June (Rewrites throughout; adds CEO and analyst comments, background on listing)

By Aditya Soni

Aug 20 (Reuters) - Napier Port Holdings, the operator of New Zealand’s fourth-largest port by container volume, debuted at a 12% premium to its offer price on Tuesday, as investors scooped up shares in a rare listing on the country’s bourse.

The country’s biggest IPO in at least three years comes amid heightened uncertainty around the U.S.-China trade war that has affected trading partners like New Zealand, and contributed to weaker prices of log, the biggest export from the port.

However, Chief Executive Officer Todd Dawson told Reuters that the port had not seen any slowdown in the actual volumes of logs moving at this time.

“Talks with forestry sector customers have indicated that the recent price slump in log price in particular has stabilised and there were some signs of recovery as well,” he said.

The company, whose port is located on the south coast of New Zealand’s North Island, hit the boards at NZ$2.91, giving it a market cap of NZ$582 million ($373.76 million). The stock was trading at NZ$3.0 as of 0332 GMT, compared with an offer price of NZ$2.60 a share.

Napier Port raised NZ$234 million earlier this month, after pricing its offering at the top end of a NZ$2.27 to NZ$2.60 range in an over-subscribed bookbuild.

Jeremy Sullivan, an investment adviser with Hamilton Hindin Greene in Christchurch, said investors were attracted to the company as “it is a good quality asset and was fairly priced”.

The port operator has delivered profit growth for the past two years and will join on NZX bigger peer Port of Tauranga, which has beaten the benchmark for nearly two decades.

Napier Port is 90% New Zealand-owned at listing and plans to use the proceeds to reduce debt and fund the construction of a new wharf to increase the port’s capacity.

“Our main focus is on unlocking a congestion issue and we are firmly on track of needing to expand the port for a whole wider region,” CEO Dawson said.

Napier Port is the second company to list in New Zealand this year, following the smaller float of cannabis firm Cannasouth in June, which had ended a two-year IPO drought on the NZX.

The dearth of new floats has attracted shareholder criticism, forcing the bourse to take remedial action, including a partnership with Nasdaq Inc in 2018 to attract overseas investors.

NZX Chief Executive Officer Mark Peterson told Reuters last week that he was aware of more listings as the exchange’s efforts to attract new floats come to fruition. ($1 = 1.5571 New Zealand dollars) (Reporting by Aditya Soni in Bengaluru; Editing by Bernard Orr, Jane Wardell and Subhranshu Sahu)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below