Central Plains Water Raises Capital

Central Plains Water Raises Capital to Progress Proposals

Central Plains Water Limited (CPWL) today announced details of a $3.15 million equity raising initiative to fund the company for the next two to three years.

A renounceable pro rata rights issue offers existing shareholders one new share for every existing CPWL share at $8.00 per new share. The issue is intended to fund the company as it finalises the resource consenting process for its Central Canterbury water enhancement scheme.

Since it was granted resource consents by Environment Canterbury in June, chairman Pat Morrison says CPWL now holds a valuable asset.

“The resource consents provide CPWL shareholders with greater certainty than ever before that their scheme will be built. Now the company needs approximately $3 million over the next two to three years to resolve appeals to the resource consents and prepare for the financing and construction phases of the scheme.

“Funds will be used to complete the RMA consent process, commence scheme design and investigate options to begin staged construction.

“To raise that money, CPWL is offering ordinary shares to all existing shareholders. These shares will rank equally with existing shares, and carry pro-rata rights to water,” he said.

The rights offered to existing shareholders are renounceable, giving shareholders and other investors the option of trading these rights. This will allow shareholders and other investors to increase their holding in CPWL, or sell their entitlement to others who wish to do so. CPWL has set up a website (www.cpwrights.co.nz) to assist shareholders and investors seeking to trade rights.

CPWL has recommended shareholders invest around $54 per hectare to maintain their entitlement to water from the scheme, as and when it is built. This is in addition to the $78 per hectare that most invested in the company when it was initially floated in 2004. CPWL shareholders have until 30 November to accept the rights offer, with half the subscription to be paid up front and the remainder in two instalments over the next 12 months.

The scheme, in the name of the Central Plains Water Trust, was granted resource consents to take and use water from the Rakaia and Waimakariri Rivers on 1 June this year, following hearings that took more than 15 months to complete. Shareholders and other supporters have contributed $10 million to date to progress the scheme to this stage.

Pat Morrison said CPWL was encouraged at progress since the resource consents were granted.

“All but ten of the over 2000 original submitters have accepted the decision of the commissioners to grant the consents, which after such a thorough process is a very positive outcome. We are also confident of resolving the outstanding challenges to these consents by negotiation with the other parties, which would minimise the legal costs otherwise incurred through the Environment Court process.

“Our consents provide shareholders with a valuable asset. We now need to continue our positive momentum towards a sustainable surface water irrigation scheme for Central Canterbury and therefore ensure that asset benefits our shareholders, and the wider region, in the future,” he said.

ENDS

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