- Data centre specialist DXN (DXN) has withdrawn its $6 million entitlement issue due to the recent market volatility
- As announced in early February, this entitlement issue consisted of one new share for every three shares held by eligible shareholders
- However, DXN today proposed a new entitlement issue on the basis of two new shares for every three shares held
- Shares will be priced at $0.02 compared to the previous $0.04
- In a day of bad news for the company, DXN also announced the resignation of three Directors
- As a result of this negative news, DXN has slipped almost 30 per cent on the market and shares are trading for 1.9 cents
Data centre specialist DXN (DXN) has withdrawn its $6 million entitlement issue due to the recent market volatility.
As announced in early February, this entitlement issue was proposed to be undertaken on the basis of one new share for every three shares held by eligible shareholders. Shares were priced at $0.04 each.
The money raised was planned to be used for the purchase of the assets and revenues of Data Centre 3, product manufacturing, working capital and data centre marketing.
However, DXN has proposed a new entitlement issue on the basis of two new shares for every three shares held by eligible shareholders.
These shares will be issued at a new price of $0.02 per share, which is a 26 per cent discount to the last traded price of $0.027, to raise $6 million.
This offer will result in approximately 303,681,857 new shares and new options being issued.
Given this new offer, DXN will need to seek out an extension to the current settlement date of March 19.
This new entitlement is planned to open on April 6, close on May 1, and shares will be issued on May 8.
“In light of the recent market volatility it has become necessary to re-price the capital raising, due to events completely outside of the company’s control,” CEO Matthew Madden said.
“We will continue our aggressive push to secure our market leading position in the modular market in Australasia and continue building our position in the colocation market,” he added.
DXN has also announced the resignation of three existing company Directors, Douglas Loh, Timothy Desmond and Terry Smart.
The company now only has three Directors, John Baillie, Richard Carden and John Duffin.
As a result of this negative news, DXN has slipped 29.6 per cent on the market and shares are trading for 1.9 cents apiece at 12:59 pm AEDT.