Martin Aircraft shares jumped 50 per cent on their debut on the Australian Stock Exchange after the company raised A$27 million to fund the commercialisation of its jetpack.
The shares first traded at 60 Australian cents, up from its offer price of 40 Australian cents, in its debut on the ASX. The stock briefly traded as high as 64 Australian cents.
The A$27 million in funds raised via the IPO will be used to help make its jetpack a commercial venture in 2016, and cover ongoing costs in the interim. Martin Aircraft expects to make its first jetpack delivery in the second quarter of 2016. It has a letter of intent from the US Department of Homeland Security for the provision of jetpacks and says it is negotiating another letter of intent with an undisclosed business which is in the "renewable crude oil production" sector.
The jetpack can fly for 30 minutes with a 30 kilometre range at speeds of up to 74 km/hour, compared to its nearest competitor, with only 30 seconds of flight. Martin Aircraft wants to target the light helicopter market with its jetpack, dividing potential customers between government, for surveillance and remote operations uses; first responder, for emergency, security and rescue uses; and recreational, tourism and flight school uses. It also plans to develop the Martin Skyhook, a robotic jetpack for use in conflict and search and rescue operations.
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The float was delayed after Martin Aircraft sought approval from investors to allow China-based investor KuangChi Science's to invest A$50 million, which included A$21 million worth of shares in the IPO for a 27.8 per cent stake, and between A$23 million and A$29 million in convertible notes to be taken up in the future. The Christchurch-based company subsequently changed the terms of its offer lifting the amount it was raising by A$2 million to A$27 million, while discounting the share price to 40 Australian cents apiece from 50 Australian cents.
KuangChi, which is Shenzhen-based and incorporated in Bermuda, was developed last August after technology business New Horizon Wireless recapitalised Hong Kong-listed paper and packaging company Climax International, and changed the business to focus on "novel near-space technology", according to the supplementary prospectus.
Martin Aircraft will also develop an unmanned aircraft to target the US$98 billion unmanned aerial vehicle market.
"The IPO capital raised along with additional funds in the future from KuangChi Science will allow Martin Aircraft to focus 100 per cent on the commercialisation of the Jetpack," chief executive Peter Coker said in a statement. "Our UAV has a significant operational advantage in that it is able to carry a commercial payload of up to 120kgs unlike Quadcopters who are generally limited to only a few kilograms. In addition, our ability to now be able to tap into the advanced technology that KuangChi Science offers will mean the potential of much greater capabilities in the future."
Martin Aircraft's debut comes after Aeronavics, a Waikato-based drone company with one of only two US Federal Aviation Authority permissions to be used for filming, raised to $1.5 million via equity crowd funding platform Snowball Effect. The company is shifting from an airframes supplier to offering fully built products in the growing remotely piloted aerial systems market.