Thursday 29th June 2017
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GeoOp, the unprofitable management app developer, will ask shareholders to vote on its plan to de-list from the NZAX and list on the ASX with an initial public offering in Australia and New Zealand.
Shareholders will vote at the meeting on July 14, GeoOp said today. It would issue between A$3 million and A$6 million of new shares for between 17 cents per share and 19.5 cents per share.
Market regulator NZX has suspended GeoOp's shares on the NZAX until the special meeting, at the company's request. The shares are highly illiquid, with about $5,000 normally traded per day, which means small share sales could force the IPO pricing down.
GeoOp must achieve a post-IPO capitalisation of A$15m under the ASX listing requirements in order for the listing to proceed and may need to provide a discount to the pre-IPO price in order to attract demand. The directors said they want to "avoid raising capital at dilutive pricing that would prejudice existing shareholders".
"In isolation, Geo should have been able to mitigate against pricing and dilution risk through completing the IPO at the low end of the range (AU$3m) if confronted with a large offer discount," the company said. "However, this would have presented a dilemma because if the pre-IPO price falls before the IPO is priced and investors require a higher offer discount, Geo may have had to raise more than it would otherwise wish to raise at a lower price to meet the ASX admission criterion."
GeoOp went public in 2013, selling shares at $1 apiece in private offer before its compliance listing on the NZ Alternative Index. The stock last traded on the NZAX at 22 cents, giving it a market capitalisation of $16.3 million. In previously released presentation notes detailing its desire to migrate to the ASX, GeoOp said its management team is located in Australia, 60 percent of group revenues are generated there, and its major shareholders are Australian.
GeoOp's products include GeoServices, for mobile workforce and job management, and GeoSales, a mobile sales workforce management app, and it is soon to launch its GeoCare mobile human services management tool. The company has 27,000 clients in 30 countries, including the Auckland Council, Downer and TrustPower.
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