- Service provider Webcentral Group (WCG) has entered a trading halt today as it irons out the details of an upcoming capital raising plan
- The company has not yet revealed how much it plans to raise, but shares in Webcentral will be on pause until after the weekend
- Webcentral offers domain name and hosting services, online marketing, web development, and more to small and medium businesses
- At the end of June, Webcentral had around $3.4 million worth of cash in the bank after posting a half-yearly loss of around $18 million
- Of course, since then, all focus has been on a 5G Networks (5GN) takeover offer for Webcentral, which closed yesterday
- Shares in Webcentral spiked before entering their trading halt today, up almost 17 per cent and worth 21 cents each in afternoon trade
Webcentral Group (WCG) has entered a trading halt today as it irons out the details of an upcoming capital raising plan.
The service provider’s shares will be put on pause until after the weekend, slated to resume normal trade on Monday, November 16 — unless Webcentral releases an announcement about the capital raise before then.
Webcentral has not yet told shareholders exactly how much it plans to raise or for what it will use the funding.
The company touts itself as Australia’s biggest full-service digital services provider for small and medium businesses. Formerly known as Melbourne IT, the services offered under Webcentral’s brands include domain names and hosting, online marketing, web design and development, email and office apps, and more.
Essentially, the company helps other businesses establish their brand and build a customer base online.
Taking a look at Webcentral’s latest financial report, the company had around $3.4 million worth of cash in the bank at the end of June 2020. This comes after a heavy half-yearly loss after tax of around $18 million for the six months to the end of June.
Like many companies, Webcentral blamed the COVID-19 pandemic for the decline in business activity and the subsequent loss.
5GN’s takeover bid
Of course, since then, all focus for Webcentral has been on a 5G Networks (5GN) takeover bid announced in September. When the takeover was announced, 5GN was competing against a Web.com offer for full control of Webcentral; 5GN offered 17.7 cents per share for Webcentral, which was a healthy premium to the 10-cent-per-share offer from Web.com.
The 5GN bid faced some regulatory hurdles but eventually got the green light from Australia’s Takeovers Panel.
When 5GN first lobbed the big for Webcentral, it held a 10.1 per cent stake in WCG. Yesterday, the bid closed, with 5GN holding a 56.68 per cent interest in WCG.
Shares in Webcentral spiked just before entering the trading halt today, closing 16.67 per cent up and worth 21 cents each at 2:05 pm AEDT.