By RICHARD WOOD
New capital market listed Rocom Wireless has announced a renounceable rights issue to raise $800,000 - money it now claims it does not need.
The mobile data company's Stock Exchange statement says the money will "fuel the current investments until they start generating returns as their core markets
develop".
The renounceable rights offer of up to 4,307,143 shares is priced at 18.5c a share, tradable on Monday.
But Rocom's executive director, Richard Guy, who is also Rocom's majority shareholder, said the company now had more money than it knew what to do with.
"It's crazy. We don't really need to do the rights issue but we were down that track and we flagged it in the annual report. It's not something that is crucial to the survival of the business model any more."
With the sale on June 10 of goodwill from its Telecom cellular voice contracts, the company has just received $700,000, with $500,000 due in the next few months.
That sale was to Auckland-based Telecom Business Directions franchisee Total Network 2000.
Guy has other misgivings about the issue. He risks having his shareholding diluted below 50 per cent as he cannot buy his share of the issue.
"I just haven't got the cash," he said. "If I did, I'd be taking it all."
Shareholders can take up the offer in whole or in part, sell their entitlement into the market, or a mixture of both.
Guy said Rocom did not need money to buy anything because it did all its investing last year. Investments included the purchase of NewCall's telecommunications billing system for $200,000 in shares.
The billing system would be a key component of Rocom's data services and also was offered as a business service to third parties.
Guy said the billing system was a bargain because it had been valued by PriceWaterhouseCoopers at between $3 million and $4.4 million.
With the help of an outsourcing deal from Telecom Fiji it was now returning 10 per cent of its PriceWaterhouse valuations, he said.
Rocom shares, which were issued in July 2000 at 50c, quickly rose to a high of $1.40 but have since fallen to around 20c.
