Vmoto eyes $5m raising, JV
Scooter maker Vmoto is set to raise at least $5 million from investors in Australia and the UK, partly to fund a joint venture with a Chinese manufacturer.
The dilutive cash call at 2.2c a share comes a month after the company tapped investors for $1.5 million. The funding activity comes as Vmoto rolls out retail outlets in China to crack the world's biggest market for electric scooters.
Vmoto is understood to have entered a joint venture with a private Chinese maker of electronic controller devices that are integral to the vehicles.
The Perth-headquartered company plans to spend $1.3 million of the money raised on working capital for the joint venture, which will see the Chinese partner's devices produced at Vmoto's factory in Nanjing. The deal is also being promoted as giving Vmoto exposure to customers of the partner company.
Vmoto last traded at 2.7¢ before the company entered a trading halt yesterday.
The capital raising was expected to be oversubscribed. The rest of the capital will be used to fund Vmoto's China expansion. Its four stores have all opened this year, the latest and biggest this month in Shanghai. Vmoto said it planned to have 10 outlets by the end of the year.
While pushing its own products, Vmoto's biggest source of revenue remains a three-year deal making scooters for the PowerEagle brand.
Last month's $1.5 million raising is understood to have been fast-tracked to meet an order from a Shanghai customer. It came ahead of a formal campaign in London and Australia to source the bulk of the funds.
Vmoto had a cash balance of $900,000 at June 30 and had drawn down $5.2 million of a $6 million loan facility. It lost about $550,000 for the half, but is tipping a maiden profit of $300,000 to $600,000 this calendar year.
The often cash-strapped company has struggled to raise money in the past as boardroom tussles and disappointing sales turned off investors. It is now seen as having turned a corner and attracting funds looking beyond the resources sector.
