Wellington Drive shares more than halve, looks for cash

Published: Tue 30 Nov 2010 11:07 AM
Wellington Drive shares more than halve as company goes looking for cash
By Jason Krupp
Nov. 30 (BusinessDesk) - Shares in Wellington Drive Technologies Ltd., the manufacturer of highly efficient brushless electric motors for the commercial refrigeration and ventilation markets, fell 60% to 3 cents after it said it was looking to raise $8.4 million to fund operations.
The North Shore-based company, which is backed by Warehouse founder Stephen Tindall, is looking to undertake a one-for-one pro rate renounceable rights offer at the issue price of 1.25 cents per share, it said in a statement. That's an 86% discount on the share price of 7.5 cents immediately before the announcement.
The proceeds will be used to fund working capital as sales expand, operating losses capital expenditure requirements. That follows a share purchase plan in September, which raised some $3 million at about 7 cents a share, also to fund working capital.
The company, which has been pushing to achieve profitability, posted a net loss of $5.9 million for the six months to June 30, compared to a net loss of $9.9 million in the same period previously. Revenue for the period rose to $12.6 million from $10.8 million, while cash reserves rose to $5.9 million from $5.2 million previously.
At the time chief executive Ross Green said the company continued to see robust demand for its products, with "orders are now well above sales for the first time in the company’s history". He gave no indication of when it was likely to break even.
The offer, which is expected to be launched early next year, will be made to eligible shareholders with a facility for the sales of rights to those on the record outside New Zealand and Australia.

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