Payment services provider Smart Pay has raised $4.3 million through a share placement. The capital raised will be used as working capital.
According to a SmartPay statement on the NZX announcing the raising, "To remain within the NZX rules, the capital will be issued in two tranches with an initial $1.1M of shares being issued immediately. The balance of the shares will be issued after the AGM, planned to be held on 4th October, and is subject to certain shareholder approvals being obtained. The funds will be used to the provide working capital needed to ensure the high volume of corporate sales are delivered within the timeframes agreed with its customers."
SmartPay managing director Ian Bailey says in the statement: “SmartPay has grown rapidly over the last year and has been expanding and developing its business using internal cash resources. As signalled in its annual report, SmartPay needs to ensure its capital base and ratios are appropriate for its business growth and direction.
“The capital markets have been very difficult over the last year, with low investment into smaller companies listed on the share market, making the ability for SmartPay to raise $4.3M a huge endorsement of its direction, strategy and announced performance. The placement, at 2c per share, was made to a number of private individuals and investment companies, and will increase working capital, and support the balance sheet, providing funders and shareholders with a more robust company.
"This placement, whilst at a major discount to market, is not expected to have any lasting effect on the overall market capitalisation of SmartPay but ensures that the company strengthens its balance sheet, ensures it has the working capital to meet its sales obligations and provides a solid basis to implement its growth plans.”
SmartPay has renewed business with many clients and has signed several new ones, including with Foodstuffs Auckland, Restaurant Brands, Mitre 10 and Postie Plus, the statement says.
The statement continues: "The Company also advises that it intends to undertake a share consolidation. This will follow the AGM and the issue of the balance of shares under the current share placement, on the basis of a one for ten consolidation. It will consolidate the number of shares on issue from approximately 1 billion to closer to 100 million. The consolidation is expected to move the share price out of the current low priced trading to a more acceptable level.