Shareholders Association to oppose Wynyard 'black hole'

Shareholders Association to oppose Wynyard 'black hole'

By Edwin Mitson

Feb. 11 (BusinessDesk) - The New Zealand Shareholders Association says it will oppose security software developer Wynyard's plans to sell new shares below a previously announced price floor of $2 a share when a meeting of investors is held next week.

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".

Wynyard shareholders agreed to let the board sell 15 million shares at a price of at least $2 at a special meeting in December after the company drummed up investor interest during a roadshow. However, since then global equity markets have been volatile. The meeting on Feb. 18 will see the board ask shareholders to approve the share placement it conducted in June 2015, when it raised $45 million. That would allow it to issue more shares without the $2 minimum price restriction.

Earlier this month, chairman Murray Horn wrote to investors to explain the move. "Global volatility crystallised earlier than directors expected and these unforeseen market conditions are disrupting the company's ability to raise capital at this price at this time from the investors that expressed interest in late 2015. Wynyard is a growth company that requires further capital in the short and medium term and continues to rely on support from shareholders and investors."

But the NZSA said far more explanation was needed. In particular they're concerned that Wynyard has given no indication of the circumstances or price at which it will issue new shares. It says the board would be able to offer large parcels at potentially large discounts, heavily diluting existing investors. The NZSA said it had engaged with the company and made a number of suggestions and if a reasonable solution is offered, then the association would support the resolution at the upcoming meeting.

Wynyard's shares last traded above $2 a share in February last year. A short while ago shares traded at $1.40, down 25 percent since the start of the year and down 32 percent on a year ago.

(BusinessDesk)

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