Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Energy Mad choice: 3% of PaySauce or 100% of nothing

CORRECT: Energy Mad choice: 3% of PaySauce or 100% of nothing

(Fixes issue price for new shares in 6th paragraph in story that ran Wed Nov. 21)

By Jenny Ruth

Nov. 21 (BusinessDesk) - Energy Mad says it’s calling a special meeting for Dec. 6 to vote on the company’s future, including a reverse takeover by PaySauce valuing it at $10 million.

Energy Mad is planning to sell most of its existing assets to Ecobulb, a company that has already been acting as an agent to sell Energy Mad’s energy efficient lightbulbs.

Ecobulb is owned by Energy Mad founder and former managing director Chris Mardon and his family company is Energy Mad’s second largest shareholder with 7.7 percent.

Shares in the remaining assets will then be distributed to existing shareholders on a pro rata basis.

Energy Mad will then become a listed shell company with no assets.

It will then issue the 21 shareholders of PaySauce, a company that supplies payroll software as a service, with 5.67 billion new shares at 0.18 cents each.

Energy Mad’s existing shareholders will be left owning about 3 percent of the listed company which will then change its name to PaySauce.

Independent adviser Simmons Corporate Finance says although Energy Mad had a market capitalisation of $2.8 million as of Nov. 16, it had negative net equity of $4.4 million at Sept. 30.

Simmons also says the remaining assets being distributed to Energy Mad shareholders aren’t expected to be worth anything.

But the PaySauce transaction will transform the listed company.

Before the new shares are issued to PaySauce’s shareholders, PaySauce will distribute new shares in itself to both its founders, Asantha Wijeyeratne and Troy Tarrant and to Coulthard Barnes to pay for advisory services.

It will also sell new shares in PaySauce to various new and existing shareholders to raise about $1.15 million of new equity.

The Wijeyeratne associates will end up owning 35.7 percent of the newly listed PaySauce and Coulthard Barnes and associates will own 24 percent.

Simmons says the proposed transactions are fair to Energy Mad shareholders that aren’t associated with Mardon and Ecobulb.

Ecobulb and its associates won’t be able to vote on the Ecobulb resolution.

As well as the PaySauce transaction, Energy Mad shareholders will also be asked to vote on the appointment of Asantha Wijeyeratne, Andrew Barnes, Gavin Thompson, Mandy Simpson and Nick Lewis as directors of the newly listed PaySauce.

Simmons notes that all the resolutions are interdependent.

“In our opinion, after having regard to all relevant factors, the consideration and the terms and conditions of the Ecobulb transaction are fair to the non-associated shareholders,” and the rationale behind that transaction is sound, it says.

“It is an effective means of executing the board’s decision to wind down the Energy Mad business and sell the company’s residual assets.

If the Ecobulb transaction isn’t approved “the company’s inventory would need to be sold by someone other than Ecobulb” and directors think that would result in lower sale proceeds.

The PaySauce transactions wouldn’t be able to proceed either.

“In our view, the key overriding factor in assessing the merits of the PaySauce transactions is that, in the absence of the proposed transactions, the existing shareholders’ investments in the company have negligible value at this point in time,” Simmons says.

“The degree to which they are financially better off will depend on the value of PaySauce.”



© Scoop Media

Business Headlines | Sci-Tech Headlines


Grey Power: Is Disappointed To Learn Of More Bank Closures

Many older people are being left without essential services because of cost cutting and the march of modern technology. It is now expected that most banking transactions can occur via the internet or telephone. Jan Pentecost, President of the Grey Power ... More>>


Economy: Supply Chain On Brink Of Overload Says National Road Carriers

The New Zealand supply chain is on the brink of overload and it looks like the upcoming peak imports season may push it over the edge says National Road Carriers Association (NRC) CEO David Aitken. “Worldwide supply chains are in disarray,” says Mr Aitken. ... More>>

Retail: Supermarkets Announced As Government’s Second Market Study

The Government has today launched a market study to ensure New Zealanders are paying a fair price for groceries. More>>


Statistics New Zealand: Retail Sales Recover In The September 2020 Quarter

Retail sales values recorded the largest September quarter rise since the series began in 1995, Stats NZ said today. Spending on major household items, vehicles, and groceries contributed to the strong 7.4 percent ($1.8 billion) rise in total ... More>>

Kea Aerospace: New Zealand Flies Into The Stratosphere

Development has started on a solar-powered, unmanned aircraft that can fly in the stratosphere continuously for months at a time. The zero-emission aircraft will carry a suite of imagery equipment that will be game-changing for many industries, vastly ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>


Forest & Bird: Kākāpō Wins Bird Of The Year 2020

The nation has voted and Aotearoa New Zealand has a new Bird of the Year. New Zealand’s moss-colored flightless parrot has climbed to the top-spot for the second time in Forest & Bird’s annual Te Manu Rongonui o Te Tau/Bird of the Year competition. ... More>>