24 Jun 2019

Tourism Holdings to raise $80m after profit downgrade

11:53 am on 24 June 2019

Campervan and tourism company Tourism Holdings is raising $80 million to reinforce its balance sheet, as it narrowed its profit expectations for a second time.


Photo: NZX / Supplied

The company said it had issued $30m worth of new shares to its largest shareholder, Chinese investment company Citic Capital, which increased its stake in the company to 16.9 percent.

THL said it would raise the remaining $50m through an issue of shares to existing shareholders, who will be eligible to buy one new share for every nine they already owned. The shares will sold at $3.40 each, a 16 percent discount to the company's closing price on Friday.

Chief executive Grant Webster said the extra money would be used for acquisitions, further investment in technology and to repay debt.

"The exact definition of the $80m and how it is split into the different categories is not something we are defining," Mr Webster said.

"We are certainly not in any form of distress whatsoever, this is about balance sheet flexibility, growth and being a little bit prudent given the market conditions."

It narrowed its net profit forecast for this year, to between $25m and $27m, down $1m at the top end of the range. In April it lowered its initial forecast from $32m.

THL's United States campervan rental business has been struggling, it underwent a review of the business after sales fell by 40 percent.

In April it outlined a plan to reduce operating and capital expenditure by $60m this year.