Tomizone seeks A$2 mln in share issue as boardroom shuffle puts Wolfstrike's Bailey in charge
By Rebecca Howard
July 4 (BusinessDesk) - Auckland-based and ASX-listed wi-fi service provider Tomizone wants to raise about A$2 million to repay debt as a boardroom shake-up sees its one of its bondholders assume the chair.
The company successfully completed a private placement of new shares, raising A$200,000 at 1.5 cents a share, and is undertaking a pro-rata entitlement offer to raise up to a further A$1.84 million at the same price, it said in a statement to the ASX. That's a 23 percent discount to the theoretical ex-rights price, and the funds raised will be used to redeem subscription bonds and cover working capital needs.
Tomizone also announced the appointment of Ian Bailey as chairman, replacing Tarun Kanji who resignation was effective immediately and followed last week's exit of director Januario Atencio. Bailey is currently chief executive of ASX-listed Wolfstrike Rentals Group, which was recently used for a reverse listing by New Zealand finance company FE Investments, a subscription bondholder of Tomizone and one of the underwriters in the pro-rata entitlement offer.
Matt Adams will also join the board to help the firm to "provide input and guidance in regard of operational efficiency, governance procedure and optimal capital management."
The company's 1-for-1 non-renounceable pro-rata entitlement offer is partially underwritten for up to A$1.72 million. Underwriters include FE Investments, Bailey-related entity Hippo Trustee Ltd, Copper Ltd, Blue Water Diving Ltd, among others.
Tomizone had interest bearing debt of about A$4 million as at Dec. 31 and its directors recognised the need for more capital to be raised when signing off on its ability to continue as a going concern in the company's first-half report.
Last year the company refinanced A$1.7 million of term debt with FE Investments of which A$1.25 million was rolled into convertible notes directly held by FE Investments.
Tomizone said it has entered agreements with its subscription bondholders to extend the term for 75 percent of the outstanding bonds - or A$3.15 million - to Aug. 14, 2019. Using funds from the entitlement offer, it will redeem 20 percent of the outstanding bonds - or A$840,000 - on the condition that half of that amount be reinvested into the company via the underwriting. The remaining balance will be used to fund ongoing working capital and the expansion of the business, it said.
It also said that it has completed the second tranche of its previous placement and will issue 444,444 new fully paid ordinary shares at an issue price of 9 Australian cents per share, or about A$40,000. In January the company announced it had received A$960,000 from a group of strategic investors in the first tranche.
Tomizone requested a trading halt on June 30 but last traded at 1.8 Australian cents. It joined the ASX through a reverse listing on June 1, 2015 and traded at 18 Australian cents at the time.
The company sells technology for managing a wi-fi network in a variety of countries and its customers include airports, cafes, retailers, hotels and motels. In the year to June 2016, the company reported a loss of A$4.6 million versus a loss of A$9.0 million in the prior 12 months.