Investors Hang Up On Cellnet Raising

By Glenn Dyer | More Articles by Glenn Dyer

Is it all about size?

Unlike larger companies like Cochlear, Ramsay Healthcare, and National Australia Bank, a retail offer to small shareholders by wholesale mobile phone and accessories distributor Cellnet has bombed badly.

Cellnet raised $680,000 or just over a quarter of the $2.34 million it had been looking for from the issue.

About 150 valid applications were received for 22.64 million shares at 3c each, representing a take-up rate of about 16%.

In contrast, the NAB, Ramsay, and Cochlear all boosted the size of the retail offers to cope with higher demand.

The shortfall for Cellnet leaves Melbourne-based private equity firm and underwriter Thundering Herd with 55.4 million shares at a cost of $1.7 million and will make them the second-largest shareholder after chairman Michael Wendt.

An institutional offer conducted in early May was more successful, raising $2.73 million by issuing 91 million new shares at 3c per share to Wentronic, a company related to Mr. Wendt.

This takes his shareholding up to 81.18% of shares on issue.

As with the overwhelming majority of the recent run of capital raisings, the money will help Cellnet get through the COVID-19 pandemic.

Cellnet shares have dropped from 11c a year ago to a low of 4.1 cents two weeks ago. They last traded at 4c, down 20%. That was their low for the session.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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