Dealt (ASX:DET) suffers capital raising setback as it works to rebrand and restructure

• Property management group Dealt (DET) has failed a recent effort to raise up to $93.4 million and will now have to find another way to finance its restructuring
• Formerly known as Velocity Property Group (VP7), Dealt announced a full business restructuring last year
• The plan was for the company to rebrand to Dealt Limited and dispose of its residential property development business to focus on commercial real estate
• Dealt lodged a prospectus and product disclosure statement (PDS) to ASIC to raise between $28.4 million and $93.4 million at 50 cents per share
• The funding was designed to help the company recapitalise its business rebranded
• However, Dealt revealed today that it did not reach the minimum subscription under the prospectus
• The company said it will now withdraw the prospectus and refund investments received so far as it seeks out alternatives to restructure and recapitalise

Property management group Dealt (DET) has failed a recent effort to raise up to $93.4 million and will now have to find another way to finance its restructuring.

Formerly known as Velocity Property Group (VP7), Dealt announced a full business restructuring last year, soon before posting a $3.36 million loss over the first half of the 2021 financial year.

The company said it would be renaming its business to Dealt and disposing of its residential property development business to implement a new investment strategy focussing on commercial real estate.

In light of this, Dealt purchased two loan origination businesses: AMF Finance and Digital Software Solutions.

In mid-March, Dealt lodged a prospectus and product disclosure statement (PDS) with the Australian Securities and Investments Commission (ASIC) to raise some funds as it rebranded and reshaped its business.

Under the capital raising plan, Dealt planned to issue a minimum of $28.4 million up to a maximum of $93.4 million worth of shares at 50 cents each to support its recapitalisation.

At the time, the company confidently told investors following the capital raise, it would target a six per cent annual return from its investments on top of other avenues of potential capital growth through its investment activities.

Nevertheless, the company revealed today that it did not reach the minimum subscription under the prospectus.

As such, the company must now withdraw the prospectus and PDS and arrange for all funds received under the cap raise to be returned.

Dealt’s board said the company is reviewing “several alternatives” to restructure its business and will provide a further update to investors in the next several weeks.

Shares in the new DET business are not yet listed for trade on the ASX.