SmartPay shares soar after equity, debt raising 30 May 2012
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Shares of SmartPay jumped after the eftpos terminal company said it raised $13 million in new equity capital and secured $25 million of bank facilities, allowing it to repay costlier existing debt and redeem its capital notes.
SmartPay sold the shares to institutional investors at 11.5 cents apiece, a level it hasn't traded at since November last year. The sale is subject to shareholder approval. The stock surged 39 percent to 12.5 percent today.
The company also secured new banking facilities from ASB, including a $20 million, three-year facility to recapitalise and restructure the balance sheet and $5 million as a "growth capex facility." Restructuring will include using funds to repay "high priced securitisation and mezzanine debt" and the redemption/conversion of the capital notes.
"On this basis the only debt on the balance sheet post the recapitalisation will be the ASB facility which is at a very competitive interest rate," said chief executive Bradley Gerdis.
SmartPay today reported a 39 percent decline in annual sales to $28.9 million, resulting in a net loss of $12 million. It attributed the results to a maturing of growth in the New Zealand market after an industry-wide upgrade of terminals and slower than expected growth in Australia.
It also blamed its previous business model, under which it recognised revenue from rental contracts at the time contracts were sold.
The company separately today announced the appointment of Australian businessman Ivan Hammerschlag as chairman and the departure of Ian Bailey as a director. Gerdis will join the board as managing director.
The company also named Rod Severn to the position of chief operating officer.
It has dusted off plans to seek a listing on the ASX this calendar year, it said.
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