IRG to seek cash injection via rights issue

Tuesday 20th October 2009

Investment Research Group, the advisory and brokerage firm, announced a one for four rights issue.

Auckland-based IRG received an NZX waiver to allow stock to be issued on the same basis as shares issued to the Edwin Trust, which last month acquired 17.8 million shares at 2.25 cents each, injecting $400,000 into the business.

"We had applied for a waiver to allow for shareholders to subscribe for greater than their entitlement," said IRG managing director Brent King.

IRG trading was suspended on the NZX in late August for filing a late annual report, but was allowed to renew trading in early September.

Also in August, IRG's bank granted a waiver to a covenant breach and confirmed it will continue its funding support for the company. At the time, King said IRG aimed to raise about $500,000 to bolster its balance sheet.

Today, IRG shares are trading at $0.018 cents each, down from its $0.23 cent high eighteen months ago. It has 136 million shares on issue.

In his managing diretor's address at last week's IRG AGM, King said "we have had a shocker. The year under review has been dramatic."

The ICP Bio receivership, world financial crisis and a company that IRG had a failed investment banking transaction with all occurred last year.

"Add the above to the fact that Dorchester Finance went into moratorium and Dorchester Pacific's share price crashed, we had an extremely tough year," said King.

Steps to improve the significant pressure on its balance sheet include the sale of a four person division.

"We have made share placements," he said. "Directors had forgone fees. We have reduced staff payments between 3 - 6%. I have forgone my salary since October 2008."

King said it leaves IRG clearly focussed on the media, investment broking and advisory businesses, with a focussed business plan.

"We now simply need more volume," he said.

The same AGM mentioned that IRG had discussed the prospects of a rights issue, though no final decision had been made as regulatory matters needed to be concluded.

Businesswire.co.nz

Comments from our readers

No comments yet