Kiwi investors' Arria NLG seeking funds 'as a matter of urgency'
The future of a British software company several prominent New Zealanders invested in is in doubt after its share price dropped about 73% following an announcement overnight.
Arria NLG’s software converts raw data into “plain language” reports, ranging from monitoring hospital patients and health and safety reporting to producing weather forecasts.
It has long been touted as a possible NZX listing after been described as “promising” upon listing on London’s Alternative Investment Market (AIM) in December 2013.
The company’s founding chairman was New Zealander Brian Henry, whose late-1980s bad boy brother Gerald later emerged as a shareholder as well.
Other early high-profile shareholders included the family of fraudster David Ross, economist Gareth Morgan, former Telecom head Theresa Gattung, Spark chairman Mark Verbiest and ACC portfolio manager Blair Tallot.
Shares in Arria NLG immediately spiked to £2.82 on its listing before settling back to nearly £1.30.
But yesterday the company announced it had lost a major contract, which had forced it to end discussions around raising more capital.
It says further funds will now be required in the near term if it is to continue as a going concern.
As a result, the share price plunged 73% to 8.35p ($NZ0.17), giving it a market capitalisation of £8.82 million.
Arria NLG says its contract with Shell, which was using its systems in the Gulf of Mexico, was ended by the oil company.
The termination of this contract had put a dent in Arria NLG’s revenue expectations, which therefore led it to suspend talks with various institutional and other investors it was seeking to conclude a “substantial” fundraising from in the next few days.
"The cessation of the Shell relationship creates a significant gap in the funding available to the company and further funds will be required in the near term if it is to continue as a going concern."
Arria NLG says it will re-engage with potential investors “as a matter of urgency.”
The shares held by David Ross, the man responsible for the biggest individual fraud in New Zealand, were worth upward of $400,000 at one stage and were to be split with the investors from whom he stole $115 million.
But this will now only be worth about $17,000.
The DRG Ross Family Trust share tranche was only discovered following a Fairfax Media report and were for the benefit of the fraudster’s children, Anna and Will.
His wife, Jillian, also separately held 50,000 shares in Arria NLG.