New shareholders to get tiny slice of IndraNet

Friday 8th December 2000

LOUIS ARNOUX: Intellectual capital

By Chris Hutching

New shareholders investing $5m in Christchurch-based IndraNet Technologies will own just 2.5% of company.

IndraNet is advertising, inviting investors to send back a coupon if they want to receive a registered prospectus expected to be released over the next few weeks to raise $5 million.

IndraNet says it is entering the commercialisation phase for its untried wireless network.

In June 1999 it raised $2.6 million. It has subsequently raised another $2.2 million in placements and has been trading as an unlisted security with share prices ranging from $3.50 to $4.70.

New shareholders who subscribe for the five million shares being advertised at $1 each will collectively own just 2.5% of the share capital of the company, which will be represented by 195 million shares.

The other 97.4% of the shares will be owned by existing shareholders.

The managing director of IndraNet, Louis Arnoux, and his wife, Vicki Grace, will own 45.9 million shares or 23% via InVEST Ltd as trustee for him.

The Grace Trust, principal Mick Kain and Timaru lawyer Ed O'Sullivan will own 8.3%, with Mr Kain owning another 4.1% in his own name.

The top 12 existing shareholders will own various large parcels of shares amounting to 94.2% of the total issued-share capital after the new capital raising, according to information contained in a company profile.

This week Mr Kain declined to discuss any aspects of the capital structure.

He would not say whether an organising broker was involved or if there were any immediate plans, because, he said, the company would be carrying out an information campaign soon.

The company says it has invested over $15 million so far.

About $10 million represents intellectual capital comprising the research carried out by Dr Arnoux from the 1970s to 1996.

The other $4.8 million has come from investors and placements

The advertisements IndraNet has been placing in newspapers claim the company has "a robust track record" and "over 40 years of experience in technology development, computer networking, communications and the internet." During the early 1990s Mr Arnoux was involved in research and development of a biomass burner - until 1996, when he linked up for a North Island energy scheme with international company Olivine.

Brokers say the IndraNet share issue should be viewed as venture capital.

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