Market News - 3 March 2026

Johnny Lee writes: 

HOT on the heels of its competitor Contact Energy, Genesis Energy has published its results and announced its own capital raising. 

The results would have pleased most shareholders. Net profit climbed 36%, which led to a modest increase in the dividend to 7.30 cents per share. While this is significantly lower than the dividends seen prior to the Kupe closure, it represents an increase on last years 7.13 cents per share. 

Development work continues. The Edgecumbe solar farm is now proceeding, Leeston is on track for a decision by the end of the year, and Foxton will apply for fast-track consent in the third quarter of this year. Various wind projects are also in the pipeline, including Genesis agreement to explore the viability of offshore wind in Taranaki. 

Batteries and biomass are also progressing. The battery storage project at Huntly remains on schedule and within budget, and is expected to be operational late this year. At the same time, Genesis will make its final decision regarding the expansion of this project. Additional groups are being sought to establish its biomass supply, as agreements with the existing trio Carbona, Foresta and Natures Flame, progress. 

The important news for shareholders, however, was the decision to raise $400 million via an equity issue, broken into two components. 

$100 million was secured almost immediately. This was done via a placement at $2.15 per share and closed well oversubscribed. These shares have already been settled and are trading on market. Shareholders of these new shares are also eligible for the second leg of the offer. 

That second leg is $300 million and is being raised via a separate offer at $2.05, a further discount of 10 cents per share. $300 million equates to a ratio of 1 new share for every 7.9 held, meaning that a shareholder with 10,000 shares will be entitled to 1,265 new shares, or $2,593 worth of new shares. 

Genesis is, of course, majority owned by the Government. The Crown has already confirmed it will participate in this offer to maintain this majority, meaning that full subscription is likely.

The $400 million will initially be used to reduce debt, before being used to accelerate its development pipeline.  

Combined with the $525 million raised from Contact, this Genesis offer will mark $925 million raised from two of our largest companies in the past month. This has an impact, with a notable increase in selling across the market as investors look to raise funds. With the shares now trading ex-entitlement, there have also been some shareholders electing to sell their equivalent entitlement, with the plan to buy them back at $2.05. 

The Genesis offer opens on Wednesday (4 March). Applications are made online, through the www.shareoffer.co.nz/genesis website. 

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THE influx of recent capital raisings may have led to one detail escaping shareholder notice.  

Santana Minerals has previously announced its intention to raise $30 million by way of a Share Purchase Plan, at a price of 90 Australian cents. Existing shareholders can apply for up to $24,948 AUD worth of additional shares. 

The announcement included the following paragraph: 

When determining the amount (if any) by which to scale back an application, Santana may take into account a number of factors, including any gaming by Eligible Shareholders . . .  [and] the extent to which Eligible Shareholders have sold or bought additional Shares after the Record Date.

While gaming is left undefined, those shareholders considering a partial sale of their shares above 90 cents AUD to fund the take up of those rights should be aware that this action may jeopardise their application. 

Unless extended, the Share Purchase Plan closes on 13 March. Applications are made through https://santana.capitalraisings.com. The online form requires a Validation Number, which was e-mailed to shareholders on Friday 27 February.

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ANOTHER new listing is coming to the NZX, as Taiko Critical Minerals plans to join the board this Thursday (5 March).  

Taiko, named after the petrel endemic to the area, intends to construct and operate a mine in Barrytown on the West Coast. The companys focus will be on mining and processing ilmenite, garnet and zircon. The company plans to develop both the mine and a separation plant, before exporting from Lyttleton and Timaru. 

Ilmenite is used to make titanium and titanium dioxide. It is used across many industries, including aircraft engines, artificial joints, golf clubs and as a pigment in products ranging from paint and sunscreen to food colouring 

Garnet is used in the manufacturing of waterjets, while zircon is primarily used in the ceramics industry. 

To give some context as to the scale of this operation, the independent economic assessment report estimates Taiko will create 137 jobs at an average of around $116,000 per job, produce $63 million per year in export earnings, and contribute around $1.5 million per year in the form of royalties. 

The project will have a significant impact on the local community. The Barrytown statistical area encompasses around 1,000 people, with a median income below the national average. 

At the reference price applied, the company will begin with a market capitalisation of around $45 million, although the first trade on Thursday will determine the markets perception of its value. 

The company has a number of shareholders already, and the listing will provide some liquidity for this cohort. Most of its shareholders are registered in Australia, with perhaps a third registered to New Zealand addresses. As the company raises capital throughout its development, this number will no doubt evolve. 

Local community engagement has already occurred and remains ongoing, with the company accepting some limitations on its operations in response to this. This includes limiting truck movements – to avoid drop-off and pick-up times for the local school, and agreeing to mine only during daytime hours. 

The company has applied under the Fast Track process for resource consent. This also remains ongoing. Local iwi have already expressed support for the project. 

Taiko will mark the fifth mining company to list on our exchange in recent years, alongside Rua Gold, Santana, Manuka and Minerals Exploration. While these projects have some time before hitting full production, the NZX should be pleased that after a decade of relatively few new listings, a growing number of companies are choosing to list on our exchange.

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Contact Energy Retail Share Offer

Contact Energys $75 million retail offer is open and closes on Friday 6 March.  Existing, New Zealand-based shareholders can apply for up to $100,000 worth of new shares, at a price of $8.75 per share. The pro-rata allocation is approximately 6%.

Applications are made online, through the website: www.contactshareoffer.co.nz. Payment is made via Direct Debit. Applicants will require their Validation Number to complete the online form – this number was sent to shareholders by the share registry last week.

Genesis Energy Rights Share Offer

Genesis Energys $300 million rights issue opens on 4 March. This offer has been priced at $2.05.

The Crown has already confirmed it will participate in the raise.

Shareholders on the register as at the close of business 26 February will be entitled to buy 1 new share for every 7.9 held. Applications must be made online through the website: www.shareoffer.co.nz/genesis and only require a CSN and bank account details.

Property For Industry Bond Offer

PFI has announced an offer of 6.5-year senior secured fixed rate bonds.

More details are expected later this week.

At this stage, given current market conditions, we are expecting it to offer a coupon of around 5.00%. 

If you would like to register your interest in this offer, pending further information, please contact us with the amount you wish to invest and the CSN you wish to use.

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Travel 

9 March - Whanganui - David Colman

10 March - New Plymouth - David Colman

11 March - Palmerston North - David Colman

12 March – Nelson – Edward Lee

13 March – Lower Hutt – Fraser Hunter

Chris Lee & Partners Ltd