Moa Group [NZX: MOA], the unprofitable boutique brewer, raised $5.25 million in an oversubscribed discounted rights issue to shareholders to fund further growth plans.
The Auckland-based company sold 15.92 million new shares, at a ratio of one for every two shares already held, at an issue price of 33 cents, a 5 cent discount to its current share price of 38 cents, it said in a statement. The offer was 4.9 percent oversubscribed, meaning applicants for over-subscription will be scaled to receive about 70 percent of their offer.
The rights issue comes after it raised $500,000 from five institutional investors in July, selling 1.3 million shares to the unnamed investors at 38 cents, which was a 31 percent discount to its trading price at the time, bringing the total raised to $5.75 million.
"We are happy with the support we have seen from shareholders through the rights issue," said chief executive Geoff Ross. "The capital raising means we can continue focusing on our plans to create New Zealand's beer brand globally."
At the end of its financial year on March 31, the company had $4.1 million of cash reserves, down from $11.5 million a year earlier and said it was looking at a range of financing alternatives to ensure it had adequate capital resources to support its growth plans.
Its two cornerstone shareholders, Pioneer Capital and The Business Bakery, provided Moa with a letter of commitment to provide financial support enabling the group to continue to operate for at least a year, its annual accounts showed.
The shares have plunged some 74 percent from their November 2012 initial public offer price of $1.25 which raised $16 million in capital, much of which was to support construction of an expanded brewing operation, which has not occurred owing to delays in its efforts to gain a resource consent to allow its construction.