Powerhouse shares continue slide despite investor funds
The share price of technology incubator Christchurch-based Powerhouse Ventures continues to sink in spite of investors pouring in another $750,000 before Christmas.
The value of the Christchurch City Council’s shareholding in Powerhouse has declined from $5.5 million a year ago to about $2m.
Christchurch City has the largest shareholding at 22.5 per cent but does not have a representative on the board of directors.
Powerhouse listed on the Australian Stock Exchange a year ago at $1.06 a share, falling to 24c in recent trading, after liquidation of a subsidiary and the resignation of several directors in mid-2017.
Before Christmas two investors paid for unsecured convertible notes at 32c each, providing $750,000 for operations.
The notes entitle them to 12 per cent interest a year paid monthly until June 2018 when they will convert to ordinary shares – creating a potential loss unless the shares recover.
Chief executive Paul Viney said the share price fell on light volumes of trading over the holiday period.
Viney said a significant shareholding did not give embedded rights to director representation, and he understood the Christchurch City Council had other rebuild priorities.
The next biggest shareholder is a nominee investment company with 17 per cent and the balance of ownership is held by numerous shareholders with less than 5 per cent each.
Powerhouse was established to take shareholdings in about 22 fledgling companies and help them commercialise technology developed at the University of Canterbury.
The city council holds its shareholding in Powerhouse through a fund called CRIS.
The council quango continues to monitor Powerhouse closely, according to CRIS director Grant Ryan, ‘‘... to ensure we look for opportunities to get the best financial return from this legacy investment’’.