New Zealand's Fisher & Paykel Appliances said on May 27 that Chinese appliance and electronics giant Haier will take a 20% stake in the company.
Fisher & Paykel Appliances, a white goods manufacturer, has been trying to restructure its debt, which ballooned to 518 million dollars (US$323.5 million) as it shifted manufacturing to cheaper countries such as Thailand and Mexico, and as the lower New Zealand dollar swelled its foreign debt.
The Chinese company, which employs 60,000 people worldwide, would invest between $80 million and $82 million in the company. Haier's investment is part of a $189 million capital raising exercise, which also includes a $143 millionpro-rata renounceable rights issue at 41 cents a share. The shareholder rights issue and planned property sales and inventory reductions were expected to reduce overall debt within a year by about $306 million, or 66%, Fisher & Paykel said.
"The initiatives we have announced today secure not only the company's financial health but importantly the long term future of a well known kiwi brand," chief executive John Bongard said. "A major benefit is the access it gives us to the huge and growing China market, which would have been extremely difficult for us to crack on our own."
The company also announced a loss for year to March of 95.3 million dollars, due to costs associated with moving its production, writedowns and falling sales amid the global economic slowdown.
Copyright Agence France-Presse, 2009