Sharechat Logo

Wellington Drive seeks $5 mln from shareholders in convertible note offer

Monday 10th March 2014

Text too small?

Wellington Drive Technologies, whose annual accounts were tagged by auditor PwC over forecast cash flows, will raise $5 million selling mandatory convertible notes to shareholders to help fund growth aspirations.

The notes will be sold in a renounceable pro-rata one-for-five rights issue to existing shareholders at 20 cents apiece, a premium to the last trading price of 18 cents. The mandatory convertible preference shares will pay annual interest of 5 percent, and convert at the end of a three-year term. The conversion will be one-for-one if Wellington Drive's share price is more than 24 cents, or at a higher ratio if the price is 24 cents or lower.

The offer is underwritten by SuperLife, which holds about 19.7 percent of Wellington Drive, and other institutional shareholders have committed to take up their entitlements.

"We believe we now have a stable platform on which to win further new customers and deliver growth," Wellington Drive chief executive Greg Allen said in a statement. "The mandatory convertible preference share is a great way to fund Wellington's growth goals and ensure the company can more fully explore new markets and product ideas."

Wellington Drive will seek shareholder approval at the May annual meeting to let SuperLife take up the offer, which could lift its stake in the company above the 20 percent takeover threshold.

The company held cash and equivalents of $2.98 million as at Dec. 31 after an annual net cash outflow of $2.45 million, and had its accounts tagged by auditor PwC, who said Wellington Drive may need additional funding to keep operating as a going concern.

Last year it raised $4.5 million through an institutional placement and share purchase plan.

Wellington Drive narrowed its annual loss to $3.77 million in 2013 on sales of $27.4 million, missing its target revenue of between $30 million and $33 million.

In January the company dropped its goal of breaking even on an earnings before interest, tax, depreciation and amortisation basis in the 2014 financial year, and will instead target revenue of between $30 million and $35 million. It forecasts a 2014 EBITDA loss of less than $2 million and a net loss below $2.7 million.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report