Companies: API    DHP    KENZ    PAQ    TCF    TSP   

In an encouraging sign, two City brokers have lately raised sizeable sums for clients, of which only one was an investment fund. This was the Laxey Partners-managed Terra Catalyst Fund, for which Stefan Allesch-Taylor’s up-and-coming Fairfax pulled in £116.6 million at 100p a share. Activist investor Laxey considers the case for investing in European listed property stock ‘compelling’, running directly against the current market headwind. If its theory is correct, Terra Catalyst should be able to dip into its £500 million, debt-swelled coffers to pick up bargains aplenty, with many real estate stocks discounted on anticipated asset disintegration.

Using its famed activist skills, Laxey, whose other AIM vehicle Value Catalyst Fund has put together a total return of 178 per cent since launch, thinks it can extract ‘significant value’ for investors. Between them, hedge fund GLG Partners, Insight Investment Management (the asset management arm of HBOS) and Gartmore have backed the strategy and together with Laxey own a third of Terra Catalyst. I think an exciting ride awaits investors keen on this contrarian approach.

Busy Kentz
Topping Terra in terms of market size was Middle East-focused contractor Kentz Corporation, a provider of engineering services to the buoyant natural resources sector. Although the company was hoping to attract £100 million, broker and adviser Evolution Securities can be congratulated for hauling in £66.7 million at float in current markets.

Of that total (and after expenses), some £15.6 million wended its way into the company’s own coffers, with existing shareholders securing the remainder. Chief among these is chairman Tan Sri Mohd Razali Abdul Rahman, whose company sold £34.5 million of shares but still retains a near-26 per cent stake of the same size.

Able to trace its origins back to 1919 in Ireland as MF Kent, Kentz was rescued by Tan Sri Razali, a Malaysia-born, Australia-qualified accountant who bought a controlling stake in the 1990s. Over the past decade sales have grown from US$120 million (£60 million) to $370 million with the company providing engineering, procurement and construction services across the natural resources sector.

With two-thirds of its business emanating from the booming Middle East and boasting clients including Shell, ExxonMobil, Mittal Steel and Anglo Coal, Kentz should be kept busy for some time, while its new financial firepower will help upgrade its facilities and finance bolt-on acquisitions. The float looks to have been sensibly priced, with the shares having risen from a debut of 115p to 127.5p. Kentz could be one to back.

PAQ your bags
While the IPO pipeline has slowed to a trickle, there have been one or two other interesting new issues titbits for AIM investors to chew on apart from Full List refugees API and Telspec, and bus-maker Darwen (see pages 3 and 14). One newcomer is PAQ International, a Chinese manufacturer of own-brand bags for mobile phones and other ‘softwear’ such as mp3 holders, camera bags and travel luggage – it also supplies its wares to original equipment manufacturers (OEMs), including Samsonite, Leclerc and other luggage brands.

Significantly, having moved into profit in 2006, the company plans to become ‘vertically integrated’ by moving into retail as well in 2008. Its plan is to target cash-rich young urbanites in cities such as Shanghai, Beijing and Shenzhen.

To build on the strength of its brand, PAQ’s directors plan to position its outlets inside or close to major electronics stores.

Nomad and broker Zimmerman Adams, with Hichen Harrison’s assistance as co-broker, managed to prise a straight £1 million for PAQ, with the investment arm of Allianz being the only institution with a notifiable interest in the shares, which have perked up from 6p to 7.62p in early dealings.