GeoOp share halt ahead of vote
AUCKLAND: GeoOp, the unprofitable management app developer, will ask shareholders to vote on its plan to delist from the NZAX and list on the ASX with an initial public offering in Australia and New Zealand.
Shareholders will vote at the meeting on July 14, GeoOp said yesterday. It would issue between $A3 million and $A6 million of new shares for between 17 cents per share and 19.5 cents a share.
Market regulator NZX has suspended GeoOp’s shares on the NZAX until the special meeting, at the company’s request. The shares are highly illiquid, about $5000 normally being traded per day, meaning small share sales could force the IPO pricing down.
GeoOp must achieve a post-IPO capitalisation of $A15 million under the ASX listing requirements for the listing to proceed and may need to provide a discount on the preIPO price in order to attract demand.
The directors said they wanted to ‘‘avoid raising capital at dilutive pricing that would prejudice existing shareholders’’.
‘‘In isolation, Geo should have been able to mitigate against pricing and dilution risk through completing the IPO at the low end of the range ($A3 million) if confronted with a large offer discount,’’ the company said.
‘‘However, this would have presented a dilemma because if the preIPO price falls before the IPO is priced and investors require a higher offer discount, Geo may have had to raise more than it would otherwise wish to raise at a lower price to meet the ASX admission criterion.’’
GeoOp went public in 2013, selling shares at $1 apiece in a private offer before its compliance listing on the NZ Alternative Index. The stock last traded on the NZAX at 22 cents, giving it a market capitalisation of $16.3 million.
In previously released presentation notes detailing its desire to migrate to the ASX, GeoOp said its management team was located in Australia, 60% of group revenues were generated there and its major shareholders were Australian.
GeoOp’s products include GeoServices, for mobile workforce and job management, and GeoSales, a mobile sales workforce management app, and it is soon to launch its GeoCare mobile human services management tool.
The company has 27,000 clients in 30 countries, including the Auckland Council, Downer and Trustpower.