Fletcher Building Equity Raise
Jarden acted as Sole Lead Manager and Underwriter for Fletcher Building's NZ$700 million equity raise.
Expertise
Capital markets structuring and execution, underwriting significant equity transactions on a sole basis and delivering successful outcomes in challenging market conditions.
Strategic Context
On 23 September 2024, Fletcher Building Limited (NZX/ASX: FBU) announced a NZ$700 million equity raise to strengthen its balance sheet. The transaction was structured as:
- NZ$282 million fully underwritten placement of new shares.
- NZ$418 million fully underwritten accelerated non-renounceable entitlement offer (ANREO).
- The offer price was set at NZ$2.40 per share, representing an 11.7% discount to the theoretical ex-rights price (TERP) based on ASX closing price.
The proceeds from the equity raise were used exclusively to repay existing debt, reducing leverage towards the lower end of the target range and allowing Fletcher Building to maintain its investment grade credit rating.
Execution
Jarden acted as Sole Lead Manager and Underwriter for the transaction.
Key elements of the execution included:
- Leadership from high quality domestic and offshore institutions generated strong deal momentum.
- 91% take-up across the institutional component of the entitlement offer.
- All shareholders received at least their pro-rata allocation across the ANREO and the Placement.
Under the retail component of the Entitlement Offer, retail shareholders were able to oversubscribe for shortfall shares (up to a 1x cap).
Outcome
The equity raise successfully strengthened Fletcher Building's balance sheet by reducing leverage towards the lower end of the target range, maintaining its investment grade credit rating and enhancing covenant headroom under debt facilities.
The transaction improved financial stability and resilience in the challenging market environment, allowing the company to focus on operational performance in preparation for an expected market recovery while preserving strategic flexibility.
This transaction was part of over A$2.2 billion of transactions executed by Jarden in September 2024, reinforcing Jarden's position as a leading ECM provider in the Australia and New Zealand markets.
