Wynyard Group has extended its trading halt until tomorrow in order to finalise details of a planned capital raise.
Trading in the company's shares was halted last Wednesday until today at Wynyard's request, when it also cancelled a planned share placement and special shareholders' meeting, due to be held last Thursday. It then said the placement was no longer viable and other capital raising options including a rights offer are being considered.
This morning, Wynyard said it is considering a rights offer to all shareholders to service the company's working capital needs, and is working with advisers to determine the offer structure, timing and price.
"Wynyard has requested and been granted an extension to the trading halt in order to finalise the anticipated structure of the capital raise," it said.
"Wynyard has a material dependency on raising sufficient further capital by the end of March 2016 to support the company to meet its further obligations. Based on all available information, the directors have a reasonable expectation that the capital raise will be successful although acknowledge that there remains material uncertainty."
The need for a rights offer is driven by expanding deal size, which means the company requires more working capital, and larger deals closing later than expected in the second half of 2015, the company said.
Wynyard has a material dependency on raising sufficient further capital by the end of March 2016 to support the company to meet its further obligations. Based on all available information, the directors have a reasonable expectation that the capital raise will be successful although acknowledge that there remains material uncertainty.
An interim $10 million credit facility has been arranged with major shareholder Skipton Building Society to provide the company with capital it may need while waiting for the proceeds of the capital raise. The loan is secured over the assets of the company, and the board must be confident the company can raise sufficient capital before drawing down on the facility, it said.
Wynyard will remain in a trading halt until it makes an announcement about the rights issue, or until market open tomorrow, whichever occurs first, the company said. NZX Regulation confirmed the trading halt would remain until the company makes a further announcement.
Wynyard will also release its annual earnings today, it said.
The security software developer's shareholders had been scheduled to vote at a special meeting in Auckland on a proposal to give the board more freedom to issue shares at a price below the previously announced floor of $2 per share, a plan opposed by the New Zealand Shareholders' Association.
Ahead of the meeting, NZSA chairman John Hawkins said there was no clear information about how the company would protect existing investors and that his members faced an information "black hole", although chief executive Craig Richardson said the company was "carefully considering a number of options including those that John (Hawkins) has provided."
Shareholders had earlier approved the issue of up to 15 million shares at no less than $2 per share at a December meeting to meet Wynyard's ongoing working capital needs.
The company said taking into consideration global equity market volatility and prevailing capital market conditions, it was looking at other capital raising options, including a rights offer.
Wynyard's shares last traded at $1.54 and have shed 16 percent so far this year.