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CBL placement 'heavily oversubscribed'

NZN 29/09/2016 Paul McBeth

CBL Corp has completed the first tranche of a planned capital raising in a "heavily oversubscribed" placement, selling $60 million of new shares.

The Auckland-based credit surety and financial risk insurer sold about 17.4 million shares at $3.45 apiece - an 8.2 per cent discount - to institutional investors in New Zealand, Australia and further afield, it said.

The offer had been fully underwritten by UBS New Zealand, but chief financial officer Carden Mulholland said the offer was "heavily oversubscribed".

The shares fell 1.9 per cent to $3.69 when trading resumed on Friday, still above the offer price.

"The placement provides CBL with greater financial flexibility to pursue exciting growth opportunities that we have identified," managing director Peter Harris said.

"We are very pleased with the level of support from our existing shareholders and I am pleased to welcome a number of new investors onto the CBL share register."

The funds raised will reduce CBL's debt, which the insurer says will give it enough room to pursue new opportunities. Those include accelerating existing business lines into new markets, such as selling surety bonds into Spain and Italy, and chasing new acquisitions, with the company in talks to buy a licensed shell insurance company in the US for $US6.3m.

CBL plans to raise up to a further $3mthrough a share purchase plan to eligible investors on the register.

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