This small cap tech share is missing out on the market’s gains today
The post Why the Straker (ASX:STG) share price is in a trading halt appeared first on The Motley Fool Australia. –
The Straker Translations Ltd (ASX: STG) share price isn’t going anywhere on Wednesday.
This morning the translations company’s shares were placed in a trading halt.
Why is the Straker share price in a trading halt?
Straker requested a trading halt this morning so that it could launch a fully underwritten placement to institutional, professional, and sophisticated investors and accelerated non-renounceable entitlement offer.
According to the release, the company is seeking to raise A$20 million. This comprises a A$10 million placement and a A$10 million entitlement offer. It is raising the funds at $1.90 per new share, which represents an 18.5% discount to the current Straker share price.
The company advised that the proceeds from the equity raising will be used to accelerate its growth strategies, pay down debt, and pay offer costs.
In respect to its growth strategies, these include capitalising on its IBM opportunity and targeting other enterprise customers, enhancing its SaaS offering for enterprise customers, increasing its share of existing customer spend, and continuing its active acquisition strategy.
Management also took this opportunity to remind shareholders of its expectations for FY 2022. Straker has provided guidance of revenue of NZ$50 million, which will be an increase of 60% on FY 2021’s revenue. The company is also expecting improvements in its gross margin from 53% currently.
Bailador to take part in capital raising
This afternoon Bailador Technology Investments Ltd (ASX: BTI) revealed that it will be taking part in the capital raising.
Bailador, which is already a major shareholder, will be investing a minimum of A$1.2 million through its current entitlements under the entitlement offer and up to a maximum of A$6.2 million through a A$5.1 million sub-underwriting arrangement in the entitlement offer.
The final amount invested by Bailador remains subject to the level of take-up of entitlements by existing eligible Straker shareholders.
Bailador Co-Founder and Managing Partner, Paul Wilson, commented: “Bailador is pleased to be supporting Straker’s equity raising to help execute on its future growth plans, as disclosed at Straker’s financial year 2021 results last week. We are confident that Straker will deliver on these growth plans and as a result, Bailador is seeking to take up more than its pro-rata share of the equity raising, subject to final demand from existing investors.”
The Straker share price is up 59% since the start of the year.
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