Latam Autos in $12.5m capital raising flop The Australian...

Latam Autos in $12.5m capital raising flop

• The Australian
• 11:12AM February 2, 2017
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• SCOTT MURDOCH
  
  Journalist
  Sydney
  @murdochsj
  

Latam Autos has failed in its bid to raise its minimum $12.5 million in a capital raising carried out this week.
The ASX listed company (LAA) remains in a trading halt but is due to tell the market soon that its fund raising campaign flopped.
The raising was carried out by Bell Potter but failed to spark investor interest
The struggling online car group went into a trading halt earlier this week in a bid to raise at least a quarter of its current market cap.
The group, which has been an underperformer since listing, hopes to raise between $13.5m and $18.5m. It is capitalised at just $50m.
But the structure of the deal was queried after the term sheet showed that if the company was able to raise the $18.5m, buyers would receive two-thirds of their shares now and the remainder after a shareholder vote. That means investors would be exposed to any share price moves between now and the vote.

• MORE:LatAm buyers face exposure

The shares were being placed by Bell Potter at 16c, or no discount to the last closing price.
LatAm shares are off by more than 50 per cent compared to its 30c listing price when it debuted in December 2014.
The offer was open only to institutional investors and the term sheet shows the company plans to use at least $10.9m of the cash for core business expansion, $3.9m on marketing and $1.1m as working capital.
LatAm was co-founded by investment bankers Gareth Bannan, who was with KPMG’s corporate finance practice, and Tim Handley, who worked with Gresham and UBS in M&A.
The capital raising was carried out on the same day that Carsales.com revealed it was ramping up its South American business by buying the DeMotores website in Argentina.
The site was bought for $6.7m.