Burger Fuel Worldwide, which is expanding by licensing its burger chain concept in the Middle East, raised $2 million selling shares at a discount to funds run by Milford Asset Management.
The Auckland-based company will issue 1.6 million shares at $1.25 apiece to the Milford Active Growth Fund and the Milford Active Growth KiwiSaver Fund, it said in a statement today. The shares jumped 7.1 per cent to $1.50 on the NZX.
One of Milford Asset Management's directors is Brian Gaynor, who is also a New Zealand Herald columnist.
The Milford funds are also acquiring 800,000 shares at the same price from Mason Roberts Holdings, the investment vehicle of chief executive Josef Roberts and partner Chris Mason. Mason Roberts Holdings will make $1 million by selling down its stake.
As a result of the transactions the funds will own 4.6 per cent of the company, it said.
Mason Roberts remains the biggest shareholder with 83 per cent and other public shareholders own 12.4 per cent.
Chairman Peter Brook said that even though the stock has traded as high as $1.41 recently, volumes were light and the price "represented good value to all existing shareholders". Grant Samuel advised the company on the transactions.
"This will allow the company to accelerate investment, giving it the ability to establish a stronger base for future earnings," Brook said.