On 18th April 2019, 9 Spokes International Limited (ASX: 9SP) announced that the company has plans to raise circa $5.3 million. For the purpose, 9SP will issue fully paid ordinary shares at the rate of A$0.016 per share through fully underwritten 2 for 3 renounceable pro rata entitlement offer. The record date is set for 26th April 2019. Eligible shareholders can apply for 2 new shares for every 3 fully paid ordinary shares on this date. Total expected number of shares to be offered is up to 330,180,791 to raise capital up to ~A$5,282,892.
Patersons Securities will be Lead Manager and Underwriter to the offer for the purpose. Net proceeds arranged from this capital raising activity will be used to reduce existing debt in the form of short-term funding facility on the balance sheet and will provide funds for day-to-day activities for continued growth.
Company has released the following timetable for the Entitlement Offer:
Thursday, 18 April 2019– (1) Announcement of Entitlement Offer (2) Lodge Appendix 3B with ASX (3) Lodge Section 708AA Cleansing Notice with ASX (4) Lodge Offer Booklet with ASX (5) Letter to option holders who cannot participate in the Entitlement Offer without first exercising their options lodged with ASX and despatched.
Tuesday, 23 April 2019 – (1) Letter to eligible shareholders (2) Letter to ineligible shareholders.
Wednesday, 24 April 2019 – (1) “EX” date (2) Rights trading commences on a deferred settlement basis.
Friday, 26 April 2019 – Entitlement Offer Record Date.
Wednesday, 1 May 2019 – Entitlement Offer Document and application forms despatched.
Friday, 10 May 2019 – Rights trading ends.
Friday, 17 May 2019 – Entitlement Offer will be closed.
Wednesday, 22 May 2019 – ASX advised of under subscriptions and announcement to market of Entitlement Offer results.
Friday, 24 May 2019 – (1) Issue date for Entitlement Offer and announcements made (2) Holding statements despatched.
Monday, 27 May 2019- Quotation of shares under Entitlement Offer and commence trading on a normal settlement basis.
9SP had entered a short-term funding facility on 17 October 2018. Later, on 22 January 2019, the company announced that this short-term funding facility has been amended into syndicate the facility.
One of the lenders in that syndicate agreed to convert the facility into ordinary shares on the competition of Entitlement Offer.
The amount for this conversion will be considered the lesser of (1) 83% of that lender’s part of the facility (2) the maximum amount that may be converted by that lender provided 9SP’s 15% placement capacity limitation and 20% holding has not been exceeded.
The other lenders have informed their intentions to repay the amount owing to them under the facility, signalling an unwillingness to convert the amount into equity. Although, they retain rights for such conversion under the facility agreement.
Hence, with the completion of the offer, transactions to take place are – (1) ~A$2,146,000 to be paid to the syndicate members (2) New ordinary share of ~82.89 million to be issued to convert syndicate members at the offer price. As a result of this transaction, the outstanding amount under the short-term funding facility will be fully repaid, and lenders’ security will be released.
At market close on 18th April 2019, the stock was trading at $0.020, with a market capitalisation of $9.91 million.
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