Contact's 50.01% listed Australian shareholder Origin Energy has already committed to taking up its proportion of the rights issue, while the remainder is fully underwritten by Deutsche Bank and broking houses Craigs Investment Partners and Goldman Sachs.
The offer is at a 15.4% share price discount to the three-month weighted average price, at $5.05 per share, or shareholders who do not want to take up the issue can sell those rights on the stock exchange.
Aside from the 166MW Ti Mihi power station northwest of Lake Taupo, Contact also has consents for a 250MW geothermal project and 156MW wind farm, plus draft consents for a 504MW wind farm.
For its six months trading to December, Contact reported in early February its after-tax profit was down 0.3% at $78.8 million on last year's result. But the result was well ahead of analysts' expectations.
At the same time, it announced the pending rights issue, having just signed the $623 million engineering procurement and construction contract for Te Mihi.
Contact chief executive Dennis Barnes said the $350 million proceeds would be used to strengthen Contact's balance sheet for investment in growth opportunities, the first phase being the Ti Mihi power station which will be built by mid-2013.
"Contact Energy's strategy for future growth is focused on developing a range of future generation options, including geothermal, gas, wind and hydro, and constructing selected projects at the right time," Mr Barnes said in a statement yesterday.
Forsyth Barr broker Peter Young said the Contact issue was "at a fairly good discount" which he believed would be well supported by institutional and retail investors.
The offer represented 9% of market capitalisation, which meant 69.5 million new shares would be issued, taking the total on issue to 695 million, he said.
