From the AFR:
Dubber mulls equity raising at ‘massive’ discount;
Whether Dubber Corp lives or dies is up in the air, with the cloud-based call recording software group weighing a capital raising with the help of Unified Capital Partners.It is understood a decision has not been made on whether to proceed with the cash call, and that talks were at an early-stage. However, Dubber – which voluntarily suspended trading of its shares last week when it identified an accounting anomaly – would need to raise at a “significant” discount for any deal to get over the line, investor sources said.
Dubber’s chief executive Steve McGovern was suspended last week after the audit review had become aware of inconsistencies in funds held on behalf of the company by a third-party trustee. AFROn Friday, the board announced it had suspended chief executive Steve McGovern after an audit review had become aware of inconsistencies in funds held on behalf of the company by a third-party trustee. It said approximately $3.4 million of these funds had been recovered, but Dubber was still trying to find approximately $26.6 million.Fund manager sources told this column the company would require about $25 million to $30 million to replace the missing funds, as well as a contingency buffer. The raising offer price would need to be pegged at a discount of at least 60 to 70 per cent to the last close of 22¢ a share for it to succeed, they said.It is believed UCP, which would likely oversee the raise, is also waiting to see which direction Dubber’s major shareholder, Alex Waislitz’s Thorney Investment Group, wants to take the call recording and voice intelligence software company before launching any deal. The billionaire businessman had earlier told The Australian Financial Review that he was “monitoring developments very closely”.
As of Tuesday afternoon, the company and its advisers were still waiting for auditors to approve the December 31 accounts, which any investor would presumably be keen to inspect closely before taking out the chequebook. As a part of that process, the auditors would lay down how much cash Dubber requires to be signed off as a “going concern”.Finally, there’s the question if any of the $26.6 million that went missing is recoverable. Existing backers would drive the pricing and the deal structure, including whether a part of it is done as a convertible note.
The capital raising deliberations come after Dubber executive director Peter Pawlowitsch was appointed acting chief executive and the company referred the matter to the Australian Securities & Investments Commission.
Dubber raised $10.25 million at 14¢ a share via Unified Capital Partners in July for “general working capital to strengthen the company’s balance sheet”.
The price represented a 28 per cent discount to Dubber’s last traded price on July 20.
A Dubber spokesman declined to comment.
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