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Pulse Utilities raises $4 million, locks in new shareholders

Friday 18th December 2009

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Pulse Utilities Ltd, the smart meter developer and start-up electricity retailer, has raised $4.256 million in private placements to 18 investors, including prominent racehorse owner Robert Famularo, CallPlus founder Malcolm Dick, and Buller Electricity Ltd.  

Options issued to Famularo and BEL with a total face value of $725,000 have also been issued, 250,000 exercisable in nine months at 50 cents each for Famularo, and one million over the next three years in even tranches at 50c, 60c, and 70c for BEL.

NZAX-listed Pulse plans to launch electricity retailing on the West Coast in the Buller company's network area, and the company hopes BEL will be able to enlarge its holding past the current 10%. Electricity reforms lifting restrictions on network company involvement in electricity retailing are expected next year.  Such changes would allow the BEL options to be exercised. In the meantime, BEL will have the right not to be diluted below 10%.

Pulse and BEL will also seek a Commerce Commission waiver to allow a BEL nominee to be appointed to the board.

The company told the NZX in a statement that it had placed, as intended, 8 million 50 cent shares with private investors, including 1 million shares taken up by the chief executive, Dene Biddlecombe.  Further applications for 513,000 shares at 50 cents each would also be issued, to exceed the $4 million capital sought by $256,500.

The company will now seek a permanent chairman.

"Our growth has been constrained by a lack of capital," the company said in its statement.  "We can now enter 2010 with confidence that we can implement our business plan and deliver value to both our shareholders and customers."

Further funds would be required to meet business objectives, and this would be met in the future by a combination of the outstanding options and debt funding.

"Debt funding will become increasingly logical and obtainable as Pulse gains traction and success in the medium term."

Famularo and BEL stumped up $1.2 million respectively for today's capital-raising announcements, while Dick contributed $500,000.

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