Kathmandu trading halt amid raising talk

A Kathmandu store in Adelaide. Picture: AAP

Adventurewear retailer Kathmandu entered a trading halt on Tuesday amid speculation that it is raising equity.

It is understood that New Zealand broker Forsyth Barr is working on the transaction, while Credit Suisse and its local affiliate Jarden may also be close to the action.

Sources said investors in the stock had been “war crossed”, where they have been offered information about the pending raising, although some believe that the pricing and the size of the raise are yet to be determined.

It comes as the Christchurch-based, dual-listed wrestles with the suspension of trade in its business across the Tasman due to New Zealand’s coronavirus lock down.

Kathmandu announced last week that it has also closed stores in Australia.

Major shareholder Briscoe Group, which holds about 16 per cent of the stock and previously attempted to embark on a takeover of Kathmandu, is understood to have been among the investors approached and is expected to be a supporter of the raise.

“Kathmandu understands that further information regarding Kathmandu and its further response to COVID-19 is circulating amongst market participants which soon may become material information, requiring disclosure,” the company said in a statement to the market.

Kathmandu’s market value is $289m, falling from about $870m last month.

At December, the group’s net debt of $NZ228.8m was 1.5 times its earnings before interest, tax, depreciation and amortisation.

The raise comes after the group last year tapped the market for $NZ177m to fund the $350m acquisition of surf wear brand Rip Curl through Credit Suisse, Jarden and Deutsche Craigs.