GeoOp changes rights issue to avoid waiver
GeoOp has changed the structure of a planned rights issue to get around the need for a waiver from the Takeovers Code for cornerstone shareholder North Ridge Partners to inject funds into the management app developer.
North Ridge will invest at least $750,000 irrespective of the amount raised in the rights issue and any shortfall that would increase the firm's stake would be as non-voting shares, GeoOp said.
The shares will convert to ordinary shares upon shareholder approval in line with the Takeovers Code, if they're sold to an arm's length third party, or if North Ridge's stake falls below 19.9 percent, and won't be quoted, meaning the firm won't need a waiver from the Takeovers Panel.
North Ridge had initially planned to invest at least $1 million in the 1-for-3 rights issue and sought a waiver from the Takeovers Code blocking it from lifting its stake if some GeoOp shareholders didn't take up their entitlement.
North Ridge already owns more than the 19.9 percent level which triggers the need for a formal takeover bid, and could have lifted that to 35 percent if no other shareholders took up their entitlements.
GeoOp plans to sell as many as 17.9 million shares at 20 cents apiece, raising up to $3.6 million.
Earlier this month it said it needed at least $2 million in incremental capital to fund its 2017 operating plan.
When reporting its annual earnings, GeoOp had cash reserves of about $1.1 million as at June 30 and received a further $425,000 injection to provide liquidity to the capital raising.
The NZAX-listed shares last traded at 19.5 cents, and have more than halved in value this year.