- 5G Networks (5GN) has entered a trading halt as it prepares to tap investors for $30 million
- The fresh funding is set to support the telco’s acquisition strategy as it weighs up a bid for digital services provider Webcentral (WCG)
- The publicly listed acquisition target, with a $13.4 million market cap, also froze its shares today in the wake of the 5GN news
- Under the offer, constructed as a placement, investors can subscribe for shares at $1.85 a pop
- All up, the carrier plans to issue around 16.2 million shares — making up roughly 17.7 per cent of the company’s existing issued capital
- During the placement, 5GN Managing Director Joe Demase will sell down three million shares — 16 per cent of his current holding
- Shares in 5GN last traded for $2.13, while WCG stock is frozen at 11 cents per share
5G Networks (5GN) has entered a trading halt as it prepares to tap investors for $30 million.
The fresh funding is set to support the telco’s acquisition strategy as it weighs up a bid for digital services provider Webcentral (WCG).
The publicly listed acquisition target, with a $13.4 million market cap, also froze its shares today in the wake of the 5GN news.
While it’s still unclear if the buy — which includes the refinancing of Webcentral’s current debt — will go through, 5GN told the market the funding from the placement could support other possible acquisitions.
In today’s investor presentation, 5GN said it already held a 10.2 per cent strategic stake in WCG and had conducted due diligence on the portfolio.
If both businesses were combined, 5GN believes it could generate synergies of over $7 million every year on a run rate basis.
At this stage, company shares will stay locked up until Thursday, September 10, while the communications business executes the raise.
The details
Under the offer, constructed as a placement, investors can subscribe for shares at $1.85 a pop — a 13.1 per cent discount to 5GN’s closing price on Thursday, September 3, and a 15 per cent markdown compared to the five-day volume-weighted average price (VWAP).
All up, the carrier plans to issue around 16.2 million shares — making up roughly 17.7 per cent of the company’s existing issued capital.
Wilsons will act as the lead manager for the placement, with share settlement set to take place by Wednesday, September 9, and allotment pencilled in for the following day. New shares will begin to trade on the ASX by Friday next week.
During the placement, 5GN Managing Director Joe Demase will sell down three million shares — 16 per cent of his current holding. Despite the sell-off, he’ll remain 5GN’s biggest shareholder.
Shares in 5GN last traded for $2.13, while WCG stock is frozen at 11 cents per share.