Dubber Corporation launches A$25m equity raising to secure growth ambitions

In a significant financial move, Dubber Corporation Limited has announced a A$25 million equity raising, fully underwritten to secure the company’s growth trajectory and fuel its expansion strategies. The ASX-listed firm, known for its leadership in conversational intelligence and unified conversational recording, aims to leverage these funds to support its new business initiatives and strengthen its balance sheet.

Dubber Aims for Long-Term Growth with Fresh Funds

Dubber Corporation, trading under the symbol ASX, revealed the comprehensive equity raising program on 11 October 2024, highlighting plans to raise a total of A$25 million. The initiative involves a fully underwritten placement to institutional investors worth A$3.6 million, a conditional placement to secure A$7.5 million, and a 1-for-1 pro-rata accelerated non-renounceable entitlement offer amounting to approximately A$13.9 million.

These fresh funds are expected to support Dubber’s ongoing efforts to enhance market visibility and boost sales growth, particularly in the emerging field of conversational intelligence. Additionally, proceeds will be used to reduce outstanding tax liabilities and address previously reported cases of misappropriated funds. The company also plans to cover the associated costs of this equity raising.

CEO Matthew Bellizia Leads the Way with Personal Commitment

Dubber’s newly appointed Chief Executive Officer, Matthew Bellizia, has demonstrated confidence in the company by committing A$1.25 million to the equity raising. Dubber Chairman Neil Wilson stated that this fundraising effort gives Dubber the flexibility needed to accelerate sales momentum while maintaining a disciplined approach to costs. He emphasized that the funds will allow the company to pursue a new sales strategy, ultimately providing stability and confidence to its customers.

Dubber Shares Offered at Discounted Price

The offer price of the new shares is set at A$0.015 each, representing a 48.3% discount to the last traded price of A$0.029 on 10 October 2024, and a 50% discount to the five-day volume-weighted average price of A$$1. The equity raising will issue a total of approximately 1,669.0 million new Dubber shares, which will rank equally with existing shares upon issuance.

The underwriting of the offer is being managed by Morgans Corporate Limited and Unified Capital Partners Pty Ltd, who are serving as joint lead managers, joint underwriters, and joint bookrunners for the capital raise. Legal support is being provided by Herbert Smith Freehills.

Institutional and Retail Investors Invited

The equity raising is composed of several components targeting different types of investors. Under the entitlement offer, eligible shareholders can subscribe for one new share for every existing share they hold as of 15 October 2024. The entitlement offer includes an institutional component, which is conducted in coordination with the placement, and a retail component, allowing retail shareholders in Australia and New Zealand to take part.

The institutional entitlement offer was conducted on 11 October 2024, with results expected soon. Retail shareholders will have until 6 November 2024 to decide on their participation.

Expert Opinion: Positive Sentiment Amid Aggressive Strategy

Industry experts have noted that Dubber’s recent equity raising signals a confident push towards future growth, albeit at the cost of diluting existing share value in the short term. Market analyst Richard Brown commented that this kind of strategic financial move could have a transformative impact if executed effectively, especially as Dubber aims to expand its footprint in the competitive space of conversational intelligence.

Impact on Control and Shareholders

The new equity distribution has notable implications for shareholder control. Dubber’s major institutional shareholders, Thorney Investment Group and Regal Funds Management, have each made substantial commitments. Thorney Investment Group, currently holding 19.4% of Dubber shares, agreed to sub-underwrite A$1.0 million of the offer and increase its stake. Meanwhile, Regal Funds Management, holding 1.2%, also committed to substantial participation.

Depending on the overall uptake from shareholders, these commitments could see Thorney’s holding increase up to 22.1%, while Regal could gain up to 28.9% control. The increased stakes could potentially reshape Dubber’s governance landscape, with both firms poised to play a more significant role in guiding Dubber’s growth initiatives.

A Turning Point for Dubber

Dubber’s leadership sees this equity raising as a key turning point for the company, giving it much-needed financial stability as it moves to expand its offerings and boost its market presence. With CEO Matthew Bellizia’s substantial commitment, the company aims to align its operational cash flow to achieve a breakeven run rate by the final month of FY25.

The success of the equity raising will be crucial for Dubber’s strategy, especially in delivering its promise of enhancing conversational intelligence solutions and solidifying its role as a trusted partner for communication service providers globally.