PwC’s Review Forces Aussie Oil Contractor to Cut Rights Issue Price

Lucas Gilmore, “Big 4″ observer
January 26, 2011 /

Neptune Marine Services has devalued its rights issue price to about 12,000 shareholders following the review of PricewaterhouseCoopers into its balance sheet that wrote off $99.5 million from its assets, the company said yesterday.

Before this, the gas and oil contractor based in Perth, Western Australia, initially announced that it has valued the rights issue price to its shareholders at 6¢ a share in a bid to raise equity. Neptune has to raise more than $60 million to support its ailing business.

But discussions with its investors and advisers which include Euroz Securities and Patersons Securities have resulted in Neptune reducing the price of its rights offerings to 5¢ a share. The move aims to fit in to the almost $100 million carrying values of its assets that had been written down as a result of an independent review by PricewaterhouseCoopers.

This written-off amount equals around 30 percent of Neptune’s total assets valued at $329.5 million as of June 30, 2010.

January 25, Neptune revealed its plan to raise $80.6 million by issuing a 3.6-to-one rights issue to its shareholders at 5¢ a share. Neptune’s last trading was valued at 20.5¢ per share, 75 percent more than yesterday’s rights issue price.

Neptune’s trading of shares is currently suspended until March 14, during which time its shareholders have until this date to cast their votes on equity raising.

The oil and gas contractor’s shares trading was supposed to resume February 25 as it initially planned, three weeks earlier than the final date that it had slated despite missing the release of the rights issue prospectus, which it confirmed to be issued on January 31.

However, if the rights issue would fail, Neptune, which already owes $56.2 million to National Australian Bank as of June 30 last year, warned it might resort to its debt obligations.

 

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