Old law for first sharemarket float of the year

by Hannah Norton11 Mar 2015
The first company to float on the New Zealand stock exchange this year has opted to proceed under old securities legislation.

Auckland-based freight company Fliway Group Ltd registered a prospectus on Friday to raise between $27.3m and $44.5m on the NZX main board, through the offer of new and existing shares.

Bell Gully partner at the helm of the float, Toby Sharpe, said company management opted to proceed with the IPO under the Securities Act 1978, rather than the Financial Markets Conduct Act (FMCA) 2013, which was partially implemented on December 1 last year.

“To December this year they get a choice about whether to go under the old law or the new law, and that is actually quite a hard decision and it does occupy boards.”

“You are looking at two levels. From a fundamental perspective, not that much has changed,” Sharpe told NZLawyer.

“It still involves running a thorough due diligence process. Under both Acts you have got to disclose accurate information to investors, and the process is really designed to ensure that everybody gets all the information they need to make an informed investment decision. So at a very high level, it is no different. At a more micro level, it is quite different.”

Differences in the FMCA include the requirement for issuers to prepare a single product disclosure statement (PDS) tailored to retail investors, rather than the current requirement for issuers to prepare a prospectus and investment statement, unless an exemption under the Act applies.

Fliway Group Ltd managing director Duncan Hawkesby said the IPO would raise the profile of the company, broaden its shareholder base and give it access to future capital.

“Fliway has a track record of growth and cash generation. The cash flow stability of the business has enabled us to historically fund our growth internally whilst paying down debt facilities. As a publicly listed company, Fliway will have access to an additional avenue of capital which positions us well for the future.”
The Companies Office register listed Hawkesby - son of former news presenter John Hawkesby - and his wife Gretchen Hawkesby – daughter of billionaire Graeme Hart – as the current sole shareholders of the company. They are expected to retain between 30 and 50 percent of the company following the float.

The offer consisted of broken firm offer and institutional offer, with no public pool.

Key dates included the bookbuild, pricing and allocation on 17 March, followed by the offer opening date on 18 March, and closing date on 1 April.

The allotment and dispatch of holding statements was anticipated to be on 8 April, and the expected commencement of trading on the NZX main board on 9 April.

Sharpe hoped the float was a sign of more to come for New Zealand’s stock exchange.

“We are hopeful for another buoyant year on equity capital markets (ECM). The year has got off to a pretty good start with a number of capital raisings having been announced. Fliway is obviously the first IPO… Generally the mood is positive and we are hopeful for another busy year of ECM deals.”