Wellington Drive shareholders approve $2.1M placement, guidance affirmed
(BusinessDesk) - Shareholders of Wellington Drive Technologies, the unprofitable maker of efficient electric motors, approved a $2.1 million placement to SuperLife Investments, giving the company more cash to see it through the next 12 months
Shareholders yesterday approved the placement on Oct. 5 of 13.4 million shares at 15.5 cents per share to SuperLife, a kiwisaver and insurance provider owned by closely held Aventine Group. That amounts to about 16.6 percent of the enlarged group. A further 0.38 percent is held directly by Aventine part-owner Ballynagarrick Investments, an investment vehicle of Michael and Marian Chamberlain.
The shares last traded at 15 cents and have dropped 29 percent this month.
"This provides the company with more flexibility to source funding as we move forward with our strategic partner discussions," chairman Tony Nowell says.
In announcing its first-half results in August, the company said it was looking for a strategic partner to invest in the business.
"While our forecasts show that the company has sufficient cash to operate for the next 12 months there are significant risks to these forecasts," it says.
Wellington Drive had $2.4 million of cash as at June 30.
Trading had been weaker than expected in the seasonally low months of August, September and October, though had since recovered, it says today.
Previous guidance indicating 2012 revenues of between $35 million and $38 million and a second half ebitda loss of about $2.5 million, first given in August, remains unchanged, it said.
SuperLife is having an active few months, with the announcement today that it will invest $1 million in energy efficient light bulb maker Energy Mad.