Friday 2nd March 2018
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Energy Mad plans to carry out a reverse listing with PaySauce, handing over outstanding debt to the new firm and giving shareholders a stake in a cloud-based, software-as-a-service payroll solution company.
"This is a standard reverse listing," said chair Brent Wheeler. Energy Mad, the energy efficient light bulb maker and marketer, will "buy PaySauce by issuing it a vast bunch of shares," he said. "What do shareholders get out of this? They get the creditors paid off and they get 3 percent of the shares in the (new) company," he said.
Under the terms of the deal, Energy Mad's assets will be transferred to subsidiary Energy Mad NZ. The shares in that unit will then be distributed at no cost to existing Energy Mad shareholders. It will then acquire PaySauce by issuing shares to PaySauce shareholders and change its name to PaySauce.
Wheeler said creditors will be paid off "by the guys who are being bought. They will take the assets and the liabilities." Energy Mad's financial report for the six months to Sept. 30, total liabilities stood at $4.4 million.
The value of the shares in PaySauce is approximately $10 million and the market capitalisation of Energy Mad is about $310,000. As a result, Energy Mad shareholders will own 3 percent of the new entity and current PaySauce shareholders will hold 97 percent.
The deal is subject to due diligence and shareholder approval as well as any necessary waivers from the NZX required to proceed. The two companies will seek to hold the required shareholders' meeting as "soon as practicable."
Regarding shareholder approval, Wheeler said the board is carrying out the deal as it believes it is in their best interest but investors will "get to express their view" on the merits of the transaction.
SuperLife, the funds management business owned by NZX, has a 45 percent stake in Energy Mad while Chris Mardon owns 17.4 percent through Mardon Family Holdings.
Energy Mad shares last traded at 0.3 cents and are down 87 percent over the past year.
Separately the company said it is still planning to sell some inventory to Ecobulb, a company associated with Mardon, one of the founding shareholders and former director of Energy Mad. Wheeler said Energy Mad will get a "small amount of cash" from that sale.
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