Shares of My Net Fone Limited (ASX: MNF), which provides VoIP (Voice over Internet Protocol) services to residential and business enterprises, have entered a trading halt at the request of management pending an announcement by the company of a capital raising.
As is too often the case amongst Australian companies, My Net Fone will raise cash through a “placement to sophisticated and professional investors”, meaning that these investors will be given the opportunity to purchase shares at an unspecified discount to the stock’s closing price from yesterday.
In an unfair twist, minority shareholders who have held the stock through its ups-and-downs will not be given that same opportunity, but will instead have their ownership of the company diluted, possibly in a significant way.
My Net Fone did not provide any details on how much it was looking to raise, how many shares it would issue or at what price it would sell them.
Notably, diversified automotive company AMA Group Ltd (ASX: AMA) has also announced a capital raising by way of placement this morning in yet another case where small shareholders are treated unfairly by management.
My Net Fone’s trading halt will remain in place until the time that the company makes an announcement or until 29 June, whichever comes sooner. Depending on the amount being raised and the reason for it, the shares could experience a sharp fall upon their re-open.