McAleese makes solid start after price cut

Mark Rowsthorn's new transport and logistics venture, the McAleese Group, had a solid debut on its first day of listing after slashing its issue price following a fatal truck accident in October.

McAleese's shares opened at $1.50 and closed at $1.57 after being issued at $1.47 per share on the Australian Securities Exchange.

The transport group had initially planned to price the stock at $1.65 but was forced to drop it to cover the costs of an accident involving one of its Cootes fuel tankers on the Mona Vale road in Sydney, which killed two people.

Bankers said the company, which now has a market capitalisation of $465.6 million, was happy with the performance of the stock following the restructuring of the float.

Some 8.7 million shares traded hands during the day under ticker symbol MCS, with the group raising $166.2 million after issuing 92.5 million new shares and selling 20.5 million existing ones.

Some of the proceeds from the raising will go to existing shareholders who are selling out of the company, while the remainder will be put towards repaying bank debt, the cost of the Mona Vale accident and expenses associated with the offer.

Existing investors have retained a 60 per cent stake, while new shareholders, mostly institutional investors, will own 40 per cent.

Mr Rowsthorn, a former Asciano CEO who acquired a significant holding in McAleese in late 2011 and is now chairman, has retained his 30 per cent stake in the company.

Chief executive Paul Garaty, who is also a former Asciano executive, holds about 1 per cent.

The fall in McAleese's listing price takes into account lower profit forecasts, as the company, which provides specialised transport services such as moving liquids, increases spending on maintenance.

Cootes comprises about 30 per cent of McAleese's revenue but a smaller proportion of profit due to the low margins involved in transporting fuel to petrol stations. Credit Suisse, JPMorgan and Macquarie Capital handled the raising.