The funds will allow NET to capitalise on a pivotal phase of its growth strategy as it scales into global markets.

Advanced network security software company Netlinkz (ASX:NET) has announced a big new capital raise this week, as it simplifies its capital structure and drives growth into its core target markets.

The entitlement offer will give eligible shareholders the opportunity to subscribe for 1 new NET share for every 4.2 shares they hold.

Shaw & Partners is the lead underwriter, with Australian Institutional investors sub-underwriting the $15 million capital raise.

The offer is in two components, an institutional offer to accommodate Netlinkz’s existing institutional investor, and a retail offer for the rest of the existing shareholders. Both components are fully underwritten by the lead underwriter and sub-underwriters.


Scale up

The price payable for each new share will be 2.5c, which represents a 13.8 per cent discount to the last closing price for NET shares.

The placement will give NET an important funding base to drive growth, as it gains traction across global markets with the Virtual Secure Network (VSN).

A proprietary platform, the VSN facilitates secure data transmission direct from cloud networks to ‘edge’ devices such as mobile phones, tablets, and personal computers.

In its prospectus accompanying the offer, Netlinkz said it plans to deploy more than two thirds of the funds raised ($10.7m) towards investment and working capital across its global market jurisdictions.

Around $5m has been allocated to expand capital investment in China, where NET has already won a number of revenue-generating contracts.

A further $5.7m will be allocated to working capital requirements in NET’s other markets across the Asia Pacific (excluding China), Europe, North America and the Middle East.

The funds raised will also facilitate the repayment of around $3m in short-term debt, as it simplifies its capital structure to focus on global growth opportunities.

The retail offer opens on 18 May 2021 and is available for eligible shareholders who have a two-week window to participate from 18 May to 2 June 2021. Any entitlements not taken up by eligible shareholders will be allocated to each institutional investor as per their sub-underwriting commitment.

Netlinkz CEO James Tsiolis has committed to taking his full allocation as part of the retail entitlement offer.

This article was developed in collaboration with Netlinkz, a Stockhead advertiser at the time of publishing.  

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.