Wisr Ltd (ASX: WZR) shares have returned from Monday's trading halt, only to be met by a frosty reception from investors. At the time of writing, the Wisr share price is down by a massive 17.97% to 26.25 cents.
This comes after the non-bank lender announced it has completed an institutional placement.
Wisr's capital raising efforts
One catalyst for the huge falls in the Wisr share price today may be investor fears over an impending share dilution.
According to this morning's release, Wisr has successfully raised $50 million (before costs) through an institutional placement. The company received overwhelming support from new and existing institutional, sophisticated and professional investors.
The offer will see 200 million new ordinary shares, at a price of 25 cents each, allocated to participating investors. This represents an 18.2% discount on the issued capital prior to when the company announced the placement.
Wisr will use its existing placement capacity to create the new shares. Under listing rule 7.1, this allows up to an additional 15% of its total shares to be issued without shareholder approval. The company will use an extension to the listing rule (listing rule 7.1A) to issue the remaining shares.
Investors will see the new shares added to their portfolio account next Monday 7 June.
Wisr CEO Anthony Nantes commented:
We are very pleased with the incredible demand we have received; the placement results acknowledge the track record of execution we have delivered, and significant support for the Wisr business model and forward outlook.
We are delivering a clear competitive advantage through Wisr's unique position in the consumer finance market and investors are confident in our strategy to redefine what a consumer lending company can be.
The proceeds of this capital raising will allow Wisr to build a company of significant size, scale and impact in the Australian market. We are very excited for what's ahead in FY22 and beyond.
Further to the placement, Wisr will launch a share purchase plan (SPP) for eligible shareholders. The SPP is based on the same terms as the placement, with the company hoping to raise an additional $5 million.
The SPP offer closes on 21 June, with the new shares to be allotted on 29 June 2021.
About the Wisr share price
Despite today's falls, Wisr shares have still accelerated by around 60% over the past 12 months. They are also up by more than 35% year to date. The Wisr share price surged late last month, reaching a 52-week high of 34 cents.
Based on valuation grounds, Wisr commands a market capitalisation of around $290 million, with close to 1.1 billion shares outstanding.
