eServGlobal Limited (ESG) - Placing to raise up to £10.9M and Trading Update
RNS Number : 2725S
29 November 2012
eServGlobal Limited (eServGlobal or the "Company")
Placing and Subscription to raise up to £10.962 million (AUD$16.812 million)
and Trading Update
Trading in line with guidance: EBITDA positive in H2 FY2012
HomeSend hub members represent one in every five mobile subscribers in the
Paris: 29 November 2012
eServGlobal (LSE: ESG & ASX: ESV), the global telecoms software vendor
specialising in Mobile Money and Value-Added Services, is pleased to provide
an update on trading and to announce a placing and subscription at 21 pence
per share (AUD$0.32) to raise up to £10.962 million (AUD$16.812million) (the
· Trading for the financial year ended 31 October 2012 in line with
guidance and EBITDA positive in H2 FY2012
· Five new multinational groups have joined the HomeSend platform
including: Vodafone, MoneyTrans, Xpress Money, and Airtel
· HomeSend hub members represent one out of every five mobile
subscribers in the world
· More than 15 new customers added since FY2011
· Outlook remains positive with healthy pipeline
· £10.962 million (AUD$16.812 million) fundraising at 21 pence per
share (AUD$ 0.32) consisting of:
o A placing and subscription to raise up to £6.197 million (AUD$9.504
million) conducted under the Company's current authority to issue shares (the
"First Placing" and the "Subscription")
o A placing to raise £4.765 million (AUD$7.308 million) conditional on
shareholder approval (the "Second Placing")
· The proceeds of the First Placing and the Subscription will
strengthen the balance sheet, enhance the Company's ability to compete for
larger contracts and partnerships, and will enable the Company to accelerate
technology development for HomeSend and mobile
· The proceeds of the Second Placing will accelerate payment of the
Company's AUD$7.2 million (£4.7 million) outstanding
^1 Foreign exchange rates cited in the placement are estimated at 0.652 AUD to
Craig Halliday, Chief Executive Officer, commented:
"We are delighted that both existing and new shareholders recognise the huge
progress made at eServGlobal and are pleased to place these new shares to meet
institutional demand. The proceeds will help us to take advantage of the
enormous opportunity that our technology and positioning presents.
The last six months have been focused on execution and with considerable
success. We have continued to build up our partner network and invest in our
technology while attracting major new customers onto the HomeSend platform.
The core business is EBITDA profitable in the second half and HomeSend is
poised to become the de-facto standard for international mobile remittances.
As the world continues to become more interconnected, it is our goal to
position ourselves at the center of the mobile money revolution, ensuring
global interconnectivity between the world's leading mobile operators, banks,
and money transfer organisations."
The First Placing and Subscription
The Company proposes to raise approximately £3.740 million through the placing
(the "First Placing") of 17,807,815 new ordinary shares (the "First Placing
Shares") with institutional investors in the UK and approximately £2.457
million (AUD$3.768 million) by means of a direct subscription for 11,700,000
new ordinary shares (the "Subscription Shares") by investors in Australia (the
"Subscription). The issue price for the First Placing Shares and the
Subscription Shares (together the "New Shares") is 21 pence (AUD$0.32) per
Subject to completion, the First Placing and Subscription will result in the
issue of a total of 29,507,815 new ordinary fully paid shares which will
represent 14.99% percent of the current issued ordinary share capital of the
Company. Following completion of the First Placing and Subscription, the
Company will have 226,355,521 ordinary shares in issue (the "Enlarged Share
The Company has applied for admission of the New Shares to trading on AIM and
the ASX. It is expected that such admission will become effective and
dealings in the New Shares (the First Placing Shares being represented by
depositary interests in CREST) will commence on AIM on 4 December 2012.
The First Placing is conditional upon, inter alia, admission ("First
Admission") of the First Placing Shares to trading on AIM becoming effective
by 8:00 am GMT on 4 December 2012, or such later time and/or date as Cenkos
Securities plc may agree (being no later than 8:00 am GMT on 31 December
2012). The First Placing is also conditional on the placing agreement between
the Company and Cenkos Securities plc not being terminated prior to First
Admission. The First Placing is not underwritten.
The subscribers under the Subscription have unconditionally agreed to
subscribe for the Subscription Shares. The Subscription is expected to
complete on 3 December. Neither the First Placing nor the Subscription is
conditional on the other completing.
The New Shares will when issued rank in full for all dividends and other
distributions, declared made or paid on the ordinary shares of the Company on
or after the date of issue and otherwise rank pari passu in all respects with
the existing issued ordinary shares of the Company.
The Company intends to use the net proceeds of the First Placing and
Subscription to enhance its ability to compete for larger contracts and to
work with larger partners. In addition, the Company intends to use the net
proceeds to fund further technology development for its HomeSend and Mobile
Money services and deployment of its products.
The Second Placing
The Company proposes to raise approximately £4.765 million through the placing
(the "Second Placing") of 22,690,476 new ordinary shares (the "Second Placing
Shares"). The Second Placing is conditional on obtaining shareholder approval
at a general meeting of the Company.
The issue price for the Second Placing Shares is 21 pence (AUD$0.32) per
share. The Second Placing Shares will represent approximately 10 percent of
the Enlarged Share Capital. Following completion of the First Placing,
Subscription and Second Placing the Company will have 249,045,997 ordinary
shares in issue.
A notice convening a general meeting of the Company to consider and, if
thought fit, approve resolutions required for the Second Placing is expected
to be sent to shareholders on or around 21 December 2012 to convene the
general meeting for a date on or around 22 January 2013.
In addition to being conditional on receiving shareholder approval, the Second
Placing is conditional upon, inter alia, admission ("Second Admission") of the
Second Placing Shares to trading on AIM becoming effective by 8:00 am GMT on
25 January 2013 or such later time and/or date as Cenkos and the Company may
agree (being not later than 14 February 2013). The Second Placing is also
conditional and on the placing agreement between the Company and Cenkos
Securities plc not being terminated prior to the Second Placing. The Second
Placing is not underwritten. The Second Admission is conditional on First
Admission being effected but is not conditional on the Subscription being
Subject to shareholder approval being obtained at the general meeting: (i)
application will be made for the Second Placing Shares to be admitted to
trading on AIM and the ASX; and (ii) it is expected that such admission will
become effective and dealings in the Second Placing Shares (the Second Placing
Shares being represented by depositary interests in CREST) will commence on
AIM on or around 25 January 2013.
The Second Placing Shares will when issued rank in full for all dividends and
other distributions declared made or paid on the ordinary shares of the
Company on or after the date of issue and otherwise rank pari passu in all
respects with the existing issued ordinary shares of the Company.
The Company intends to use the net proceeds of the Second Placing to
accelerate payment of outstanding loans.
Update on progress with HomeSend
The past year has seen outstanding growth in the HomeSend network which
continues to gain momentum. HomeSend, the leading mobile international
remittance platform offered by our strategic partner BICS and based on
eServGlobal technology, has secured significant new wins in the past six
months, effectively tripling the number of subscribers under contract
coverage. With the addition of Airtel, Vodafone, and other key multinational
deals such as Xpress Money, mobile operator groups representing approximately
one in every5 mobile subscribers in the world have joined the hub,
positioning it as the leader in international mobile remittances. In addition,
MoneyTrans will be opening sending corridors to HomeSend in six European
countries from the money transfer organisation's agents.
Recent major wins include:
· A landmark agreement with Vodafone Group to provide international
mobile remittances. Vodafone has 400m subscribers worldwide,
is present in over 30 markets, and is a driving force in mobile money. Its
innovative M-Pesa platform generates domestic revenues of
over US$200m per annum in Kenya alone. Worldwide, Vodafone's M-Pesa users
perform approximately 165m transactions per
month (c. 2bn per annum). On the sending side, Vodafone is working to deploy
mobile money in developed markets which we expect
to further accelerate global adoption.
· Airtel Africa will use HomeSend across its 17 African affiliates.
Mobile financial services are expanding rapidly across the continent,
and HomeSend now covers four of the continent's largest and most influential
operator groups - Airtel Africa, Vodafone, MTN and
Qtel. Comprising over fifty individual operators in Africa, these groups have
access to an estimated 300m subscribers on the continent.
Wireless Intelligence estimates that Africa has 365m total unique
· A multinational operator group with hundreds of millions of
subscribers has signed to the platform.
· Xpress Money, a subsidiary of UAE Exchange and one of the world's
leading money transfer organizations with an estimated US$4Bn
in annual transfers, joined the hub.
· MoneyTrans, a multinational money transfer organization with 70,000
payout locations, plans to begin sending money into the
HomeSend network from France, Spain, Italy, Holland, Belgium and the UK. An
initial corridor between Belgium and the Philippines
· ContactSystem, the leading money transfer organization in Russia
operated by RusslavBank, is working with Homesend to
enableremittances towards Russia and the CIS countries.
· These wins add to the existing HomeSend ecosystem including
operators such as MTN, Qtel, and Lyca; mobile money leaders
including Smart Telecom and Globe Philippines; and banks in Nepal and
The Board is pleased to report that, as anticipated in the trading update on
29 June 2012, the pipeline is healthy and H2 FY2012 is anticipated to show
growth in monthly average revenues and a decrease in monthly average costs.
New customer wins in our core mobile money and value-added services business
have helped push revenues in the second half above the first half (H1:
AUD$12.6M). Subject to audit, full year results are anticipated to be in line
This year we have materially completed the phase-out of legacy contracts from
the USP business and we have increased higher-margin mobile money and
value-added services revenues. With the flow through of operational cost
savings made in H1, the Company expects that the business will be profitable
on an EBITDA basis in the second half of the year and in line with guidance.
Core business outlook
The core mobile money and value-added services business continues to perform
well and, subject to audit, is EBITDA positive in H2 FY2012. We are winning
new customers - adding more than 15 since FY2011 - and our pipeline continues
to look strong for FY2013. This year we have won agreements to work with new
and continuing customers to deliver innovative mobile money solutions in East
Africa, Southeast Asia, the Middle East, and the Indian Subcontinent. We also
continue to extend our partner ecosystem, adding new system integrators and
hardware providers like Wincor Nixdorf.
One of the key highlights this year was a new, five year deal with an Asian
conglomerate. Valid for up to 9 million subscribers, the US$1.6 million deal
is expected to grow on the back of anticipated subscriber growth. This
multinational organization has holdings in the telco, financial, and consumer
goods industries, and the reach and influence to become a regional leader in
mobile services. eServGlobal's PayMobile platform will be deployed across the
subscriber base for the project.
Cash and Facilities
During the period, the Company was in receipt of the final payment of
AUD$11.4m relating to the sale of the USP business to Oracle in 2010. This,
combined with improved EBITDA levels, means at 31 October the cash positions
is AUD$3.5m, after having repaid AUD$6.8m in shareholder loans. As at 31
October 2012, the Company had AUD$7.2 million in outstanding shareholder
loans; AUD$6.0 million of these loans are owed to entities associated with
three of the Company's directors (Richard Mathews, Craig Halliday and James
Brooke) and are repayable in February 2014. The remaining AUD$1.2 million is
owed to a former shareholder (Guinness Peat Group International Holdings BV)
and is repayable in August 2013. The Company intends to repay these loans with
the proceeds of the Second Placing.
Change in Address
eServGlobal has changed its registered address to the following:
c/o Simpsons Solicitors
Level 2, Pier 8/9
23 Hickson Road
Millers Point NSW 2000
Facsimile: +61 2 8014 5060
eServGlobal specializes in Mobile Money solutions and Value-Added Services
(VAS), to help Mobile Service Providers increase their revenue and gain and
maintain customer ownership. eServGlobal invests heavily in product
development, using carrier-grade, next-generation technology and aligning with
the requirements of more than 80 customers in over 55 countries.
For more than 28 years mobile and financial service providers have used
eServGlobal solutions to lead and innovate in their local markets, leveraging
their core assets and their trusted agent and subscriber relationships.
eServGlobal provides full "end-to-end" and "any account to any account" Mobile
Money Services and International Remittance Services. In strategic partnership
with BICS, the HomeSend solution is the only mobile-centric international
remittance hub to gain endorsement from the GSM Association.
eServGlobal's Value-Added Services in promotions, loyalty and messaging enable
service providers to engage with their subscribers in a personalized and
To reduce time-to market and to meet the needs of operators and banks,
eServGlobal provides multiple licensing alternatives as well as SaaS-based
products and services.
eServGlobal is listed on the Australian Securities Exchange (ESV) and the
London Stock Exchange AIM (ESG). More information at: www.eservglobal.com
For further information, please contact:
Tom Rowe, Company T: +61 (0)2 8014 5050
Christina Tubb, Head of Investor Relations
Cenkos Securities plc www.cenkos.com
Ivonne Cantú/Stephen Keys (Nomad) T: +44 (0) 20 7397 8980
Julian Morse/Alex Aylen
Newgate Threadneedle www.newgatethreadneedle.com
Caroline Evans-Jones/Josh Royston/Hilary Millar T: +44 (0) 20 7653 9850
Charles Stanley Securities www.csysecurities.com
Dugald Carlean/Paul Brotherhood T: +44 (0) 20 7149 6000
This information is provided by RNS
The company news service from the London Stock Exchange
IOEZMMZMFLFGZZG -0- Nov/29/2012 07:01 GMT
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