The Whispir Ltd (ASX: WSP) share price has returned from its trading halt and is tumbling lower on Tuesday morning.
At the time of writing, the communications workflow platform provider’s shares are down 4% to $3.72.
Why is the Whispir share price tumbling lower?
This morning Whispir announced the successful completion of an institutional placement.
According to the release, the company has raised a total of $45.3 million via a placement to new and existing institutional investors at an offer price of $3.75 per share. This represents a discount of just 3.6% to its last close price.
This placement leaves Whispir with a pro forma cash balance of $54 million.
Why is Whispir raising funds?
The release explains that the proceeds from the placement will be used to accelerate Whispir’s growth strategy in its three key markets of Australia and New Zealand (ANZ), Asia, and North America, and capitalise on global digital transformation and automation trends.
It will also strengthen its balance sheet to provide the company with working capital flexibility.
Whispir’s CEO, Jeromy Wells, commented: “Since our IPO in June 2019, Whispir has been executing on its growth strategy, increasing ARR, revenues and customers within our mature ANZ business and growing operations in Asia and North America.”
“Digitisation tailwinds provide a significant opportunity for us to fast-track our product roadmap, delivering higher-value products to drive platform utilisation and adoption. Funds raised will also enable us to increase our presence within the competitive North American market, where we are targeting underserved SME and SMB organisations.”
Share purchase plan
In addition to the institutional placement, Whispir is seeking to raise up to $3 million through a share purchase plan. These shares will be offered to eligible shareholders at the same price of $3.75 per new share.
Though, with the Whispir share price currently trading below this price, demand for its share purchase plan may not be overly strong unless there’s an improvement between now and its closing date on 19 March.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Whispir Ltd. The Motley Fool Australia has recommended Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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