Nuplex agreement with banks, new capital plan

16 March 2009

Nuplex Industries Limited

Company Announcement to NZX and ASX

Nuplex reaches agreement with banks and finalises plan to raise new capital of NZ$110 million

Agreement with Banks

As indicated in its interim results announcement, Nuplex has been in discussions with its banks to seek amendments to the terms of its senior debt facilities, in particular to the senior debt cover ratio (SDCR) covenant.

Nuplex is pleased to advise that it has successfully concluded these discussions and agreed various amendments to its senior debt facilities with its banks. The banks have agreed to amend the SDCR covenant (currently 3.00 times) so that it is tested monthly based on rolling 12-month EBITDA as follows:
Period Maximum SDCR
Up to 30 April 2009 Waived
1 May 2009 to 29 June 2009 3.50 times
30 June 2009 to 29 September 2009 3.25 times
From 30 September 2009 3.00 times

The agreement reached with the banks is subject to completion of documentation. The banks have also required conditions to the amendment of the SDCR covenant including (in addition to usual banking terms) the following:

• Net proceeds from the planned capital raising (see below) shall be applied to reduction of amounts outstanding under the senior debt facilities;

• Net asset sale proceeds (other than inventory) in excess of NZ$2 million shall be applied to reduction of amounts outstanding under the senior debt facilities;

• Covenants will be measured on a monthly basis;

• Any dividends for the financial year ending 30 June 2009 shall not exceed 60% of net profit after tax without agreement of the banks; and

• General security will be taken by the banks over all of Nuplex’s New Zealand and Australian assets by the allotment date for the capital raising.

If the planned capital raising is not completed, Nuplex will be subject to a further review by the banks of their banking covenants.

Nuplex currently has the following senior debt facilities and other debt funding:
Form of Funding Provider Amount Maturity
Bank Debt Citibank A$50.0m November 2009
Bank Debt CBA A$100.0m November 2010
Bank Debt HSBC A$100.0m November 2011
Bank Debt Westpac A$100.0m November 2011
Capital Notes (1) Public NZ$52.6m September 2012 (2)
(1) If capital notes holders do not accept the new terms of the capital notes at the election date and seek to redeem their capital notes, Nuplex may, at its option, either convert the capital notes into ordinary shares or redeem them for cash.

(2) Election date, rather than maturity date.

Nuplex currently has in place bank debt facilities totalling A$350m. Following receipt of the proceeds from the planned capital raising, these facilities will be drawn to approximately A$240m. Nuplex does not anticipate any issues in repaying the amount due to Citibank in November 2009 (subject to completion of the planned capital raising).

Planned Capital Raising

To ensure Nuplex can comply with the amended terms of its senior debt facilities, Nuplex has decided to raise NZ$110m of new equity capital. This capital is planned to be raised by two methods:

A placement of new ordinary shares to institutional and habitual investors (Placement); and

A pro-rata renounceable rights issue of new ordinary shares to existing Nuplex shareholders (Rights Issue).

The terms of the Placement and the Rights Issue (including the amount of new capital to be raised by each method) will be confirmed following completion of a book-build process. The book-build process will commence today and is expected to be completed by 10am on Wednesday, 18 March 2009.

The Placement and Rights Issue will be managed by First NZ Capital Securities Limited. It is also intended that the Rights Issue will be fully underwritten by First NZ Capital Securities Limited.

As the number of new shares to be allotted under the Placement will likely exceed 15% of the number of Nuplex’s existing shares on issue, the Placement is expected to be subject to Nuplex shareholder approval. Accordingly, Nuplex plans to hold a special shareholder meeting on Friday, 3 April 2009 to seek such approval (if required). If shareholder approval is required for the Placement but is not obtained, both the Placement and Rights Issue will not proceed.

New shares issued pursuant to the Placement will not be entitled to participate in the Rights Issue.

The new capital to be raised from the Placement and the Rights Issue will in the opinion of the Directors be sufficient to meet Nuplex's short and medium term capital needs in the current economic and trading environment.

No money is currently being sought and no applications for securities will be accepted or money received with respect to the Rights Issue. Those shareholders who are eligible and wish to acquire shares under the Rights Issue will need to complete the application form which will be in or accompany the offer documentation which will be distributed by Nuplex in connection with the Rights Issue (which will include an investment statement for New Zealand shareholders).

Trading Halt

Nuplex has requested NZX and ASX to halt trading in Nuplex's ordinary shares from 10.00am (NZ time) on Monday, 16 March 2009 to 10.00am (NZ time) on Wednesday, 18 March 2009 while the Placement is undertaken.

ENDS

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