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- DomaCom Limited (DCL), a fractional investing platform provider, is holding a special meeting to re-approve the contentious AustAgri purchase
- The company entered a trading halt on May 12 after questions were raised over the proposed acquisition by Nine’s A Current Affairs program
- ASX has told DCL it must stay suspended until it completes a $1.9 million capital raising to guarantee that it has adequate funds to maintain operations
- Funds under management grew by approximately 10 per cent since the start of the quarter to $84.4 million as at July 16 2021
- During the prolonged suspension DomaCom Limited’s shares have been sitting at 6.5 cents
Fractional investment platform provider DomaCom Limited (DCL) is set to hold an extraordinary meeting to re-approve the thorny AustAgri acquisition.
DomaCom stated on September 4, 2020, that it had signed into an implementation agreement pertaining to a plan for a DomaCom sub-fund to buy AustAgri, but the deal ultimately led to the company entering a trading halt on May 12.
The suspension was in relation to the proposed acquisition which was put on hold after an investigation by Nine’s A Current Affairs (ACA) program accused AustAgri of making false representations about its company.
In the September announcement, DomcaCom said AustAgri was a company “with operations spanning dairy, fresh milk powder and infant formula, as well as the export of livestock and chilled beef and lamb”.
DomaCom later admitted to the ASX that the statement was “partially inaccurate” because AustAgri did not own such assets, but that the purpose was to allude to “a state of affairs that would exist if the acquisition” were completed.
The proposed acquisition now needs at least 75 per cent of AustAgri shareholder support, with DomaCom adding a termination clause to allow for an $8.5 million termination fee payable to DomaCom if AustAgri does not migrate to the DomaCom Fund after the settlement of the acquisition of Cedar Meats.
A $7 million deposit and further working capital payments have been made in a deal to buy Cedar Meats by an AustAgri subsidiary, according to previous DomaCom statements.
DomaCom also announced its June quarterly report that it had completed the development of the Equity Mortgage product, which will complement Crescent Finance’s Shariah-compliant house financing solution, with the product set to launch in early August 2021.
Capital Raising
DomaCom will offer up to 30,506,852 ordinary shares at a price of $0.06551 per share in a non-underwritten private placement to sophisticated and wholesale investors to raise up to $1,998,503 before fees.
The ASX has told DomaCom that it must stay suspended until it completes a capital raising in order to guarantee that the company has adequate funds to maintain operations.
DomaCom also plans to conduct a non-underwritten 1 for 5 non-renounceable Entitlement Offer in August 2021.
Finances
DomaCom said funds under management grew from $76.9 million to $83.1 million in the quarter ending June 30, 2021, and had now increased to $84.4 million as of July 16, 2021.
During the quarter, net cash spent in operations declined by $68,000 (excluding the impact of exemption payments received under the COVID-19 Cash Boost For Employers program).
The drop is mostly attributable to a $77,000 reduction in employment expenses with DomaCom having $353,000 in cash at the conclusion of the June quarter.
DomaCom CEO Arthur Naoumidis said the June quarter had been a very challenging quarter for the company.
“I am pleased to be able to start the new financial year in a much better position than we faced in May and June,” he said.
“I look forward to updating our shareholders on the outcome of the AustAgri transaction during these next few weeks.”
During the prolonged suspension, DomaCom Limited’s shares have been sitting at 6.5 cents.
