10th Jun 2016 07:01
LONDON (Alliance News) - WANdisco PLC Friday proposed raising USD15.0 million by issuing a considerable amount of shares through a subscription and placing priced at a premium in order to support its ongoing activity levels.
The company also said its Chief Financial Officer, Paul Harrison, will step down at the end of September to take up the same role at a company that "does not compete" with the London-listed firm, and a search for his replacement is underway.
"WANdisco has been loss-making to date. The purpose of the offer is to raise funds to be used to support the company's established activities, with a particular focus on maintaining current activity levels in product development and in sales and marketing, both directly and in support of partners," said the company.
The company, which provides public software and big data, has proposed issuing 6.5 million new shares in the business priced at 160.0 pence each to raise a total of USD15.0 million before expenses.
Some of the new shares are being issued to certain existing shareholders and a subscription has also been conducted simultaneously, with the total shares being offered representing 17.76% of WANdisco's enlarged issued share capital.
The price of the shares are a 3.2% premium to the company's closing share price on Thursday.
"The board believes that raising equity finance using the flexibility provided by a non pre-emptive placing is the most appropriate and optimal structure for the company at this time. This allows certain existing institutional holders and new institutional and other investors the opportunity to participate in the offer and avoids the requirement for a prospectus, which is a costly and time consuming process," said the company.
WANdisco has been loss-making to date and the funds are needed to maintain current operations. The company has been focused on reducing costs as well and the board believe further investment is essential, adding they will consider other funding options should shareholders reject the proposals.
However, the board also warned it may have to consider reducing the scale of its operations if it does not secure funding, stating that whilst that would protect the company's short term financial position, it would also compromise the longer term prospects of the business.
In a possible attempt to woo shareholders, WANdisco also published a trading update that showed material improvements during the first quarter of 2016.
The company said new sales bookings in the first quarter of 2016 were "significantly ahead" of last year, with four big data contract wins being secured in the period. Unfortunately, one big data contract was delayed and therefore unrecognised in the period, but WANdisco said the deal is still advancing.
The company's big data customers at the end of the first quarter stood at 14, a big rise from the six at the end of 2015.
"WANdisco's partner centric strategy in Big Data, focused particularly, but not exclusively, on cloud infrastructure providers, has been validated by the strong growth that its partners are reporting," said the company.
WANdisco said three huge customers have all seen large lifts in the amount of cloud platform revenue being generated, stating Amazon reported a 64% year-on-year rise in revenue in the first quarter of 2016 whilst IBM posted a 42% rise and Microsoft a 27% increase.
Cash overheads were "well below" the first quarter of 2015 and the headcount at the end of May had fallen to 126 from 143 at the end of last year.
"For the first quarter of 2016, the adjusted EBITDA loss and Net Debt were both better than planned. At this early stage in the year, and notwithstanding limited forward visibility of sales, the Board is confident in the prospects for the full-year," said WANdisco.
By Joshua Warner; [email protected]; @JoshAlliance
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