Shares in crime fighting software company Wynyard Group have hit a record low, almost halving this morning after its week-long trading halt lifted.
The company went into a trading halt on February 17 after a planned $30 million share placement stalled, leaving it scrambling for working capital.
Wynyard this morning said it was offering a rights issue for eligible shareholders at 85 cents per share for every one in four shares, after saying it had "a material dependency on raising sufficient further capital by the end of March 2016".
Trading resumed at market open this morning and the share price plunged 48 per cent before bouncing back slightly.
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They've handled things pretty badly. They said they had done a capital raise when they hadn't completed it which you shouldn't do, and then they had an issue with one or two of the contracts not being completely signed off.
This followed the release of its full year result yesterday, posting a loss of $44 million - double its previous year loss of $22 million.
Chief executive Craig Richardson said the company was still in good shape and had a strong sales pipeline for 2016, but admitted it had made a few mistakes.
"In retrospect we should never have got to the point where we had to scramble to get this done and so we have some learnings from that," Richardson said. "We're lucky that we have such a supportive New Zealand institutional shareholder base and retail shareholder base that when we asked for their help, they've been unbelievably supportive."
Several of Wynyard's shareholders have already confirmed they would support the rights offer, including Milford Asset Management which owns 7.5 per cent of the company, however executive director Brian Gaynor said while shareholders were positive about the company's long term plans, they were unhappy with some of its decisions.
"They've handled things pretty badly," Gaynor said. "They said they had done a capital raise when they hadn't completed it which you shouldn't do, and then they had an issue with one or two of the contracts not being completely signed off," he said.
"I understand most of the shareholders have agreed to contribute to the rights issue - we're still confident about the long-term prospects of the company albeit that some of the ways they have handled things in the last few months hasn't been to our satisfaction as shareholders."
The rights offer closes in a month on March 24.