Chinese appliance manufacturing giant Haier’s 20% buy-in to Fisher & Paykel Appliances has led to it being removed from the stock exchange’s top 15 companies list, to be replaced by Freightways.
Shares in F&P Appliances yesterday traded flat, around 75c, while Freightways’ shares opened at $2.99 to end the day at $3.09, on light volumes.
Craigs Investment Partners said while F&P appliances market capitalisation was $550 million and Freightways at $450 million, the May decision by Haier to take an $80 million 20% stake in F&P took a fifth of shares out of trading and reduced liquidity – prompting its removal from the top 15.
Aside from the Haier stake, F&P had also just shored up its finances with about $210 million of capital raising at the time, designed to pay down mounting debts incurred during the past three years as F&P moved its manufacturing offshore to low wage economies.
Following the closure of the Mosgiel plant and loss of 430 jobs recently, F&P last week formally opened its combined design and call centre site in Dunedin which employs 110 staff.
Fisher & Paykel has also announced a new deal to sell part of its East Tamaki site in Auckland to Direct Property Fund and lease back the company’s head office and factory there.
Part of the site – with the head office and factories where fridges and washers were manufactured – has already been sold unconditionally for $NZ53 million ($A42.9 million).
A payment of $NZ49.2 million will be made on the October settlement date, and the balance of $NZ3.75 million payable within six months.
The proceeds from the unconditional sale will be applied against the company’s amortising loan, which will be fully paid off by October 31, six months earlier than scheduled.
The remainder of the site has already been sold conditionally for $NZ21 million, subject to finance.
At March 31, F&P Appliances had a total debt of $NZ518 million ($A419.33 million) and in June it announced new $NZ575 million ($A465.47 million) debt refinancing package with the aim of reducing its debt by about $NZ306 million ($A247.71 million) with an equity raising, sale of sites in East Tamaki, and Brisbane worth $NZ106 million ($A85.81 million) and cuts in inventory of $NZ114 million ($A92.29 million).
F&P Appliances’s revenue for the year to the end of March dropped 2.4 per cent to $NZ1.37 billion ($A1.11 billion). It made a net loss of $NZ95.3 million ($A77.15 million).
The sale and lease back of the East Tamaki site, covering 14.4 hectares and over 62,000 square metre of offices and factory buildings, is part of the company’s strategy of shifting some manufacturing offshore.
Its Dunedin, Brisbane and California factories have been moved to cheaper, more convenient locations in Mexico, Thailand and Italy.
It has already sold its 16.45ha Mosgiel site on the outskirts of Dunedin to Fonterra for construction of a new 45,000 tonne drystore and a 17,000 tonne coolstore.