Snowball to grow through capital raising
Listedfinancial planning groupSnowballwill make a capital raising it says will enable the company to move more quickly towards profitability.
The $1.3 million raising aims to give the group the ability to pursue its objectives of scale by possibly acquiring or merging with a third party.
At present, Snowball says the chance of its trading being cash flow positive by the end of June 2003 is unlikely, despite revenues being expected to increase in the June quarter.
The move will involve a rights issue of $750,000 at $0.20 per share, fully underwritten by Equity Partners for no fee, as well as a $550,000 placement to businesses, including Trent Capital and Andover Group.
Snowball executive chairman Philip Kelly says he intends to step down as chairman once the proposed funding is undertaken and will conclude his executive role with Snowball at the end of June, but plans to remain a non-executive director.
On satisfying the conditions of underwriting the capital raising, Equity Partners joint managing director Peter Johnson will join the board.
The board also intends to review remuneration and incentive arrangements within the company, with a possibility of offering share options to key management and staff.
In its announcement, Snowball says it will continue to perform well in difficult market conditions by controlling costs tightly but still pursuing growth.
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