Wellington Drive works to plug fund-raising shortfall

Monday 2nd March 2009

Wellington Drive Technologies, a designer and manufacturer of energy-saving motors and fans, is edging closer to its fund-raising target after a shortfall in its rights issue last week.

The company raised $9.1 million of the $11.4 million it had sought via the one-for-three rights issue that closed on Friday. It also sold shares at the same price, 10 cents apiece, in a placement to an institutional shareholder, lifting the total to $10.8 million, the company said in a statement today.

"The company is in discussions with a potential investor to purchase the remaining 6.5 million shares," it said. It described the response from investors as an "exceptional result in the current financial environment."

Shares of Wellington Drive rose 2.8% to 11 cents on the NZX, having tumbled 70% in the past 12 months. At 10 cents a share, the company is offering to sell the stock at a record low.

Wellington Drive posted sales of $14.5 million in 2008, about $300,000 less than forecast in its prospectus, while operating costs jumped 80% as it rolled out its worldwide expansion. The $9 million annual loss was better than forecast, reflecting a foreign-exchange gain. It forecasts revenue to soar 150% this year, with the company reaching breakeven by the second half.

By Jonathan Underhill

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