1987 - Year of the shrinking market?
US dollars will be the main target in 1987 for Industrial Equity Limited (IEL), a fast-growing diversified holding operation, now the fourth largest company in Australia.
The favoured source of the funds will be the Euromarkets, where IEL has been only once before, in April 1985, for a US$155 million Euronote issue. But IEL is also considering tapping the US domestic markets.
"Our requirement is for US dollars or sterling. We anticipate one or two issues of US$100 million a throw,' said Robert Birrell, acting treasurer.
Mandates are still up in the air. IEL has an historical relationship with Bankers Trust, which arranged the Euronote issue, and with Lloyds through Brierley Investments Ltd (BIL--its New Zealand-based parent). "We would probably look to use the major player in any particular market,' said Birrell. His preference is for an uncomplicated issue, particularly one without convertible aspects.
Following a rights issue of A$160 million and a share placement to selected Australian institutions of A$116 million, further equity issues were unlikely, he said.
"The market seems to be saying they would like us to offer some equity, but we will, I think, resist that and come to market with straight debt.