No need to underwrite cash call, says GPG

GUINNESS Peat Group (GPG), the UK investment vehicle of the New Zealand entrepreneur Sir Ron Brierley, is saving hundreds of thousands of pounds of City fees by not having its pounds 8.5m one-for-ten rights issue underwritten.

Instead, GPG yesterday said that the issue price of 25p represented a big enough discount, 30 per cent, to enable it to avoid underwriting costs.

The 30 per cent discount relates to the closing price on 31 March 1994 of 36.5p, the last day before the printing of the rights document.

The rights, which was originally announced together with GPG's 1993 results in March, will be used to fund further investments, the company said yesterday.

The proceeds of the rights will be placed on deposit pending investment. GPG increased profits from pounds 7.75m to pounds 27.7m last year, including a maiden pounds 2.2m contribution from the fund management group Brown Shipley, which it bought in April 1993.

GPG said yesterday that following completion of the rights a capitalisation issue would be made on the basis of one new ordinary share for every 10 held, including those issued in the rights. Shareholders will vote whether to approve the capitalisation at the annual meeting on 2 May 1994.

Arrangements have been made to enable qualifying shareholders, as an alternative, to pay for the rights in Australian dollars at a price of 53 cents per share or in New Zealand dollars at a price of NZ66 cents per share.

GPG did not pay a dividend for 1993, but a payout 'will be seriously considered in 1995'.