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EROAD completes Placement and Institutional Offer

Monday 11th September 2023

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EROAD Limited (“EROAD” NZX/ASX:ERD) is pleased to advise that it has successfully completed the fully underwritten institutional entitlement offer (“Institutional Offer”) component of its underwritten accelerated pro rata entitlement offer of 1 New Share for every 2.06 Existing Shares to eligible institutional and retail shareholders (“Entitlement Offer) and the institutional placement (“Institutional Placement”, together with the Entitlement Offer, the “Equity Raise”) of new fully paid ordinary shares in EROAD (“New Shares”) as announced on Thursday 7 September 2023. EROAD expects to raise approximately NZ$50 million under the Equity Raise.


The capital raised from the Equity Raise will strengthen EROAD’s balance sheet, giving it greater flexibility to continue its strategy of sustainable, profitable growth maximising long term shareholder value. The net proceeds from the Equity Raise will be used to repay debt, providing funding headroom to allow EROAD to further underpin its growth strategy, especially in the key North American market.


Institutional Placement


The Institutional Placement was strongly supported by a number of existing and new Institutional Investors across New Zealand, Australia and offshore raising $11.6 million at the issue price of NZ$0.70 per New Share.


Institutional Offer and Institutional Bookbuild


The Institutional Offer raised gross proceeds of approximately NZ$17.6 million with approximately NZ$4.3 million of entitlements taken up by eligible institutional shareholders. Approximately NZ$13.3 million of entitlements were not taken up under the Institutional Offer, which included our two largest shareholders who elected not to participate. However, it was pleasing to see several new and returning investors participating. Entitlements not taken up under the Institutional Offer contributed into the institutional shortfall bookbuild that was conducted on Friday, 8 September ("Institutional Bookbuild").


The Institutional Bookbuild was well supported, with all New Shares attributable to unexercised institutional entitlements allocated, and a clearing price of NZ$0.70 per share achieved.


The clearing price of the Institutional Bookbuild was the same as the Issue Price of the Entitlement Offer. Eligible institutional shareholders who elected not to take up their entitlements and whose New Shares were sold in the Institutional Bookbuild will not receive any consideration for the entitlements not taken up by them.


Announcement of A$ Price


The Australian dollar issue price (“A$ Price”) has been set at A$0.65. The A$ Price was determined using the NZ$:A$ exchange rate published by the Reserve Bank of New Zealand on its website at 3.00pm (NZST) / 1.00pm (AEST) on Friday, 8 September 2023.


Retail Offer


Eligible retail shareholders will be invited to participate in the retail entitlement offer component of the Entitlement Offer (“Retail Offer”). The Retail Offer will open at 10.00am (NZST) / 8.00am (AEST) on Tuesday, 12 September 2023 and close at 7.00pm (NZST) / 5.00pm (AEST) on Thursday, 21 September 2023. Eligible retail shareholders will have the opportunity to participate at the same Issue Price and offer ratio as the Institutional Offer. Eligible retail shareholders can choose to take up their entitlement in whole, in part or not at all. Entitlements cannot be traded or sold on the NZX or ASX. Applicants must apply via the online application process and are encouraged to do so as soon as possible.


New Shares attributable to entitlements not taken up under the Retail Offer, and those which would otherwise have been offered to ineligible retail shareholders, will be offered for subscription through a retail shortfall bookbuild (“Retail Bookbuild”) to be held on Tuesday, 26 September 2023.


Any premium achieved above the Issue Price from the sale of New Shares in the Retail Bookbuild will be paid (less applicable taxes) on a pro-rata basis to those eligible retail shareholders who do not take up their entitlements in full and ineligible retail shareholders. There is no guarantee that any premium will be achieved through the Retail Bookbuild.


Further information and shareholder enquiries


Shareholders who have any questions about the Equity Raise are encouraged to read the Offer Document and consult their broker, solicitor, accountant, financial adviser or other professional adviser.



 EROAD completes Placement and Institutional Offer

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