Swift Networks Group Ltd (ASX:SW1) Closes $3.3 Million Entitlement Offer
Entitlement Offer Completion
Swift Networks Group Ltd (ASX:SW1) has completed its non-renounceable pro-rata entitlement offer, raising $2.3 million before costs, despite a challenging market in April. The entitlement offer was partially underwritten by PURE Asset Management Pty Ltd, securing up to $2.0 million worth of shares.
Use of Funds
The raised funds will be allocated towards the development, marketing, and inventory costs for Swift Access 2025, as well as reducing the company’s debt. Additionally, funds will support further product feature developments and the progression of Swift Access 2026, which includes a new hardware solution to reduce system installation costs.
PURE Loan Facility Restructure
Swift has restructured its PURE Asset Management loan facility. The principal amount owing has been reduced from $7.6 million to $6.2 million, with the repayment date extended to March 31, 2027. New covenants include maintaining a minimum cash balance of $1,000,000 each month and limiting capital expenditure to $350,000 per quarter.
Executive Comments
Swift’s Managing Director, Brian Mangano, stated: “Swift is well-positioned to benefit from significant changes in its core markets of Mining and Aged Care, as Mining moves away from traditional PayTV systems and Aged Care adapts to new funding and compliance regulations. Our new generation product, Swift Access 2025/26, has been in development for 18 months. It will continue to offer all the media and communication capabilities of the existing product but will also encompass a new user interface and will integrate into external streaming Apps, to create an ideal connected TV entertainment and communications system. Switching costs have contributed to customer inertia inhibiting adoption of our products. The new product will have a lower production cost and be easier and cheaper to deploy into customer facilities. We believe this, together with lower subscription fees compared to PayTV and our enhanced features will lead to faster growth than has historically been the case. We wanted to offer our existing valued shareholders the opportunity to participate in our first capital raise in over four years to support funding our exciting plans for growth.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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