Turners Group is contemplating a new offer to investors aimed at raising up to $30 million to ensure it has funds available in the event it identifies acquisition opportunities.
The offer would be for $25 million of two-year convertible bonds with the ability to accept oversubscriptions of up to $5 million, the Auckland-based company said in a statement. The bonds would pay annual interest of 6.5%.
The company already has $23 million of bonds in the market, issued in 2014, pay interest of 9% but interest rates have tumbled since then. At the same time, Turners stock has gained 20% to trade recently at $3.12.
Turners intends to allow holders of the existing bonds to use their redemption proceeds from those bonds to subscribe for new bonds, though chairman Grant Baker says he would expect “a reasonably high conversion rate” to shares, so the new issue would likely raise more capital.
Turners became the name for the group after Dorchester Pacific acquired Turners Auctions in 2014 to complement its largely automotive loan book and insurance business. It survived the collapse of many finance companies in the wake of the global financial crisis. Since then, it has been on a buying spree, adding Levin-based lender Oxford Finance, Greenwich Life Insurance and Christchurch-based Southern Finance.
The company had no specific targets at the moment “but we’re generally keen on making more acquisitions and we want to be in a position to act,” Baker says.
Last week the company acquired a one-hectare industrial site on the corner of Roscommon Road and Vogler Drive in Wiri, South Auckland, for $4.8 million, which will allow for expansion of its truck and machinery business.
In July, Turners bought Auckland used car importer and dealer network Buy Right Cars for $15.3 million, gaining eight dealer sites across Auckland and a workshop in Manukau.
