Thursday 8th February 2018
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ERoad has opened a share purchase plan for existing shareholders which is larger than initially indicated, following its $15.5 million capital raising last year.
In December, the company announced its plan to raise at least $18 million of new capital, with at least $4 million of that coming from an SPP. Today, it said that has increased to $6 million "given the strong interest that investors have shown in the SPP and ERoad’s desire to provide its loyal retail shareholder base with an opportunity to participate in the SPP", bringing its total raise to $21.5 million.
Existing shareholders will be able to buy a minimum of $1,000 and up to $15,000 of shares at a maximum of $3.04 per share, the price paid by investors in its share placement to institutional investors in December. The price paid will be the lower of a 4.7 percent discount to the average end of day market price of the shares over the five-day trading period from Feb. 21 to Feb. 27 2018, and $3.04.
Some $5 million of the shares sold in the $15.5 million placement came from NMC Trustees, its biggest shareholder which is associated with chief executive Steve Newman. NMC now holds 21.7 percent of the company.
The share purchase plan opens today and will close on Feb. 27, with shares allotted on March 6.
When it announced the placement in December, Eroad said it would use $4.5 million to upgrade customer support systems and as working capital for inventory growth, $5 million to replace non-bank lender funding "to simplify ERoad’s funding structure and operational activities", and the remaining $8.5 million to "develop and expand disruptive product offerings as well as building a digital ecosystem to better collect and analyse transport data and potential inorganic growth."
In an investment presentation accompanying the capital raise announcement, ERoad said it is seeing ongoing growth in New Zealand and Australia, and increasing momentum in North American unit sales. It said revenue in the second half of FY18 will be predominantly driven by growth in new contracted units, recognition of additional revenue for units sold part way through the prior period, and increased recurring revenue per unit at $54 per month.
The shares last traded at $3.60, and have gained 95 percent in the past 12 months.
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