It is at present considering a bond issue to institutional investors, not retail bonds, in New Zealand to raise possibly $20 million-$60 million, and a decision is likely within the next three months.
Tasman Capital Partners distributed a release on Tuesday, lauding its trading profit, restructuring, sales presence and survival through the recession, prompting market speculation the nationwide hire company may soon be put up for sale, or recapitalised by a sharemarket float.
Hirequip chief executive Brian Stephens was contacted yesterday and said the underlying reason for the release was to update the market, outlining changes made during the recession; also highlighting its earnings before interest, tax, depreciation and amortisation of more than $20 million for the first time in three years.
The company has invested $26 million-$28 million in general fleet equipment during the past two years, acquired another outlet in Auckland, opened a new Christchurch branch and has two small acquisitions to consider at present.
"It was time to update the market, to let customers know we've survived what has been a tough couple of years in New Zealand all round," he said.
Mr Stephen said in "having ridden out the recession" that without the support of its bankers and landlords many Hirequip staff could have lost their jobs.
Hirequip's hire revenue is forecast to hit $55.5 million in the year to June, up from $51.1 million in 2010-11, and $44.3 million in 2009-10.
The company has forecast hire revenue for 2012-13 of $61.2 million, The New Zealand Herald reported yesterday.
"As the market knows, we are looking for some equity, in order to take advantage of opportunities for growth," Mr Stephen said.
Craigs Investment Partners broker Peter McIntyre said any eventual listing by Hirequip would be welcomed by the market.
Its release of financial information indicated it was probably looking towards expansion and growth, and would want to raise some capital to do so.
While the rebuilding of Christchurch has been frustratingly slow to gain impetus for many in the construction sector, Mr Stephens said Hirequip was busy, with a new branch, supporting the cleanup, demolition and rebuilding of underground infrastructure services; until the larger commercial works get fully under way.
Hirequip director and Tasman Capital co-founder Rob Nichols was contacted in Australia yesterday and said the company was still in the "early preliminary stages", of considering an institutional bond issue worth up to $60 million, and he hoped to be able to update the market in about 12 weeks.
Bonds were an option which came before considering a listing, which would not be considered for "at least three years", but Hirequip was a well-recognised brand and had a good record with previous shareholders when listed, he said.
In late 2006, Hirequip was sold to Australian-based PES Finance Ltd for $165 million, after a tender process for the country's largest hire equipment business.
Hirequip sold the hire business to PES, then sold its other legacy assets and distributed funds to shareholders. PES was a wholly owned subsidiary of Pacific Equipment Solutions Ltd, a company associated with Nikko Principal Investments Ltd.
Nikko later came under pressure and sold its assets, including Hirequip, to a United States company, which in turn sold them to private equity managers, including Tasman which took on Hirequip almost three years ago.
Hirequip was originally formed from the hire equipment business started by Stuart McKinlay, of Dunedin, and the former investment company Southern Capital Ltd, of the late Howard Paterson, whose estate sold its 7.1% shareholding for more than $7 million in February 2004.
Southern Capital completed a $35.15 million buyout in 2003. It paid $17.35 million in August 2002 for a 50% interest in Hirequip.
Then in May 2003, shareholders backed their board and approved a second 50% purchase of Hirequip for $17.8 million.
In a share-swap deal at the time, then Hirequip managing director Mr McKinlay sold his 50% stake to Southern, in return receiving an issue of new shares and becoming the company's largest shareholder with a 26.7% stake. Southern Capital adopted the Hirequip name and listing, its last listed date being March 2006; before the November sale that year to PES Finance.
