Refining New Zealand has announced plans to raise just over $43 million to fund a new venture as it becomes an import only terminal.
Marsden Point oil refinery Photo: 123rf.com
The equity raising will fund private storage services, which it said will be a "complementary growth opportunity" as the company rebrands and changes its operations.
The rebranded company name, Channel Infrastructure NZ Limited, will come into force when the import only operations commence in April next year.
Refining NZ said private storage provides customers with increased product supply scale and flexibility.
The contracted private storage capacity will require an initial capital commitment of around $30m, and is expected to deliver revenue of $50m on a fixed rental basis over a 10-year term.
The company said it is "actively engaged" with customers on further opportunities for private storage, which could require a further investment of around $25m and bring in revenue of up to $60m.
The planned $43.5m equity raise will be used to fund contracted private storage services and those under negotiation, the company said.
"The company is going through a significant transformation, undoubtedly the biggest change in its 60-year history, taking us from being a complex refining business with volatile earnings, to an infrastructure business with earnings underpinned by long-term contracts," chief executive Naomi James told investors this morning.
Refining NZ it will undertake the equity raise through an underwritten $38.5m share placement and a non-underwritten $5m share purchase plan, with the ability to accept oversubscriptions.
James said in addition to private storage, the company was looking at broader opportunities to utilise Marsden Point, its large industrial sites, electricity and gas connections and the proximity to Auckland.
The company was placed in a trading halt before the share market opened this morning.
