Water and sewage treatment company Fluence, controlled by businessperson Ron Lauder, is preparing to raise A$30 million (NIS 71 million) in a private placement to investment institutions at A$0.44 per share. The company is listed on the Australian Securities Exchange at a A$271 million market cap (NIS 645 million), 12.9% lower than the market price. ASX trading in Fluence's share has been halted pending completion of the placement on Friday.
In addition to the private placement, Fluence is allowing its existing investors to buy its shares at the same price as in the placement, up to A$6 million, which is likely to increase the company's proceeds from the financing round to A$36 million (NIS 85.6 million). Fluence had $15.6 million in cash at the end of the second quarter.
Fluence will use A$12 million of the proceeds to develop its partnerships in China, and will also used money raised in the private placement to expand its plant in China and for other purposes.
A reduced net loss and a negative cash flow
Fluence was founded as a merger between Israeli company Emefcy, founded in 2008 and listed on the Australian Securities Exchange starting in 2015, and RWL Water, which was controlled by Lauder. The company is currently managed by managing director and CEO Henry Charrabe from RWL and Emefcy cofounder CTO Ronen Shechter.
Emefcy and RWL merged two years ago at A$0.85 per share, higher than the price in the current offering and the current market price. As of now, Lauder holds 28.6% of Fluence's shares through RSL, with a current market value of A$77.7 million.
Fluence's revenue totaled $23.8 million in the first half of 2019, down from $32.8 million in the corresponding period in 2018, On the other hand, the net loss attributable to shareholders was cut 66.7% to $17.7 million, because the company recognized a $56.3 million decrease in goodwill in the first half of 2018, which detracted from its bottom line in that period. Fluence generated a negative $22.6 million cash flow in the first half of 2019, 17.2% less than in the corresponding period last year.
Published by Globes, Israel business news - en.globes.co.il - on October 16, 2019
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