MGM completes oversubscribed $5.5 million share placement
MGM Wireless, the makers of the SPACETALK all-in-one children’s smartphone, watch and GPS device, have raised $5.5 million in an oversubscribed share placement with Australian investors.
Funds from the placement are earmarked to support MGM’s future growth initiatives including purchase of stock and working capital required to ramp up sales of SPACETALK and the accompanying AllMyTribe app.
The share offer was cornerstoned by a number of institutional and sophisticated investors including Thorney Investment Group, Perennial Value, Eight Investment Partners and James Spenceley.
The Australian-listed MGM Wireless (ASX:MWR) will issue approximately 1.62 million new fully paid ordinary shares at $3.40, a 9.7% discount to the 10-day volume weighted average price and a 9.8% discount to MGM Wireless’ last traded share price.
Canaccord Genuity (Australia) was sole bookrunner and joint lead manager of the placement with Gleneagle Securities.MGM expects settlement of the placement to take place on 26 September and new shares allotted on 27 September.
New shares under the placement will rank equally with existing ordinary shares, with 369,397 new shares to be issued within the company’s current placement capacity under listing rule 7.1 and 1,248,250 new shares under listing rule 7.1A.
In August, MGM announced it had secured a “watershed agreement” with UK-based Sky, Europe’s leading media, entertainment and telecommunications company, which has commenced selling SPACETALK through Sky Mobile on a £10 per month plan.
MGM sold 18,270 SPACETALK units in FY19, up 1,023% compared with 1,785 units in its first nine months of availability, and the company anticipates sales of approximately 90,000 SPACETALK watches in FY20 as Sky accelerates its roll out and further agreements with distributors in Europe and Australia are finalised.
Once settlement of the placement is completed, the company will have approximately 14,132,147 shares on issue and MGM’ board has resolved that at the upcoming annual general meeting, it will ask shareholders to approve a share split which it believes will increase the general trading liquidity of the stock.
While the ratio of the split is still to be finalised, it is expected to be 10 new shares for every current share.
MGM Wireless CEO Mark Fortunatow said: “The success of the placement demonstrates strong support for the company from institutional and sophisticated investors who recognise the significant market opportunity for SPACETALK and its clear competitive advantage in the children’s wearables market,” said MGM Wireless CEO Mark Fortunatow.
“We are delighted to welcome new shareholders and thank existing shareholders who participated in the placement.”